B Law & Tax
22 June 2023

Tax advisor: Navarra approves the revised text of the special tax regime applicable to foundations and other non-profit entities, as well as tax incentives related to patronage

The Foral Legislative Decree 2/2023, published in the Official Gazette of Navarra on June 13, has approved the revised text that includes the provisions of the special tax regime applicable to foundations and other non-profit entities, as well as the tax incentives related to patronage. This consolidated text seeks to regularize, clarify and harmonize the different regulations that have arisen at different times and in different situations, and which have been created with ideas that do not always coincide. The aim is to solve some of the problems posed by the current regulations, without altering the current legal system. In drafting the recast text, the regulations that previous legal reforms had disordered have been ordered, drafted in a more understandable and applicable manner, and contradictions, interpretative doubts or repetitions present in the previous regulations have been corrected. This contributes to increase legal certainty for both the tax administration and taxpayers.

In compliance with this authorization, this consolidated text has been prepared, which compiles all the permanent and general regulations of legal rank that currently regulate the specific tax regime of foundations and sponsorship activities, as well as the tax incentives related to patronage.

The process of elaboration of this foral legislative decree has been carried out following the principles of necessity, effectiveness, proportionality, legal certainty, transparency and efficiency. In relation to the special tax regime applicable to foundations and other non-profit entities, tax advantages have been established both in Corporate Income Tax (IS) and Personal Income Tax (IRPF), in addition to other tax benefits related to Inheritance and Gift Tax (ISD), Transfer Tax and Stamp Duty (ITPAJD), Territorial Contribution and Economic Activities Tax (IAE). These benefits are linked to patronage in areas such as culture, the social sphere, the environment and sports.

In addition, the same Official Gazette published Foral Order 131E/2023, dated May 24, issued by the Councilor for Rural Development and the Environment. This order approves the application form to access and maintain the tax regime established in the twelfth additional provision of the Foral Law 10/1996, of July 2, 1996, which regulates the tax regime of foundations and sponsorship activities, applicable to environmental patronage.

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