Fiscal Advantages

...the right to deduct 35% of the tax base corresponding to the donations...

a) Deductions in the individual income tax (iRPF)
in accordance with article 19 of Spanish Law 49/2002, taxpayers subject to Spain’s personal income tax (iRPF) (Spanish: impuesto Sobre la Renta de las Personas Físicas) will have the right to deduct from the gross tax due 25% of the tax base for this deduction for contributions made to the "Fundación don Quijote". The same deduction will apply to the book value of the donation of assets or rights, as long as the donations made form part of the assets of the ‘Fundación don Quijote’ and as long as they contribute to the execution of activities that meet the purpose and objectives of the Foundation.

The tax base used to apply deductions for donations, investments and expenses related to the Foundation may not exceed 10% of the net tax base of the taxpayer. no deduction may be applied on the excess (above 10% of the net tax base).

b) Deductions in the tax base for the corporate tax
Those entities subject to the Spanish corporate Tax (Spanish: impuesto Sobre Sociedades) will have, in accordance with article 20 of Spanish Law 49/2002, the right to deduct from the total tax due after deductions 35% of the tax base corresponding to the donations or contributions made to the "Fundación don Quijote".

In the case of pure and simple donations of assets or rights, in order for the donating entity to be able to deduce 35% of the book value from taxes due, the assets or rights must become part of the material assets of the ‘Fundación don Quijote’ and must contribute to the execution of the activities that accomplish the Foundation’s objectives.

The tax base used for the deduction may not exceed 10% of the gross tax base for the corporate Tax for any tax period. The deduction may be applied to donations exceeding this limit in the tax periods concluding in the 10 consecutive years immediately following the contribution.

The donations corresponding to taxable periods which are not deducted immediately may be applied in the tax liquidations for the tax periods that end within the 10 consecutive years immediately following the donation or contribution.

c) Deductions of the tax due for the tax on income of nonresidents
Article 21 of Spanish Law 49/2002 establishes that taxpayers subject to the tax on income of nonresidents (Spanish: impuesto Sobre la Renta de no Residentes) may apply a deduction over the gross tax due of 25% of the tax base for this deduction in the declarations they present for taxable events that fall in a period of one year from the date of the donation or contribution.

The tax base of this deduction may not exceed 10% of the gross tax base of the aggregate of the declarations presented during this period.

This deduction may be applied by those taxpayers subject to this tax who operate within Spain through a permanent establishment, as defined by Spain’s tax agency (Spanish: agencia Tributaria).

d) Exemptions from the capital gains tax on land
With respect to the Spanish capital gains tax on land (Spanish: impuesto Sobre el incremento de Valor de los Terrenos de naturaleza urbana), in accordance with article 23.2 of Spanish Law 49/2002, capital gains which are declared in the transfer of land or in the conveyance of property (in rem) rights carried out as part of donations and contributions to the ‘Fundación don Quijote’ will be exempt from the capital gains tax.