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Practical Manual for Companies 2020.

Fiscally-protected cooperatives

Tax-protected cooperative societies are classified as:

  1. Protected cooperatives

    Regulation: Article 6 Law 20/1990

    These are entities that, regardless of their date of incorporation, comply with the principles and provisions of the General Law on Cooperatives or the Laws on Cooperatives of the Autonomous Communities, and do not incur any of the causes of loss of tax-protected status in article 13 of Law 20/1990.

    Remember:

    For the non-protected cooperatives that have lost their tax-protected status due to incurring in any of the causes of article 13 of Law 20/1990, that are regularly constituted and registered in the Registry of Cooperatives, the rules of Chapter IV of Title II and Title III of Law 20/1990 will continue to apply. In this case, cooperatives will pay general rate of corporate tax all of their results.

  2. Specially protected cooperatives

    Regulation: Article 7 Law 20/1990

    They are the first-degree protected cooperatives of the following classes:

    • Associated Worker Cooperatives.
    • Agricultural Cooperatives.
    • Community Land Exploitation Cooperatives.
    • Cooperatives of the Sea.
    • Consumer and User Cooperatives.

  3. Second-degree cooperatives

    Regulation: Article 77 Law 27/1999

    These cooperatives are made up of at least two cooperatives . Other legal entities, public or private, and individual entrepreneurs may also join as partners, up to a maximum of 45 percent of the total number of partners, as well as working partners.

    purpose is to promote, coordinate and develop common economic objectives of their partners and strengthen and integrate their economic activity.

    Depending on the type of cooperatives that are associated, second-degree cooperatives will be classified as protected or specially protected (article 35 of Law 20/1990).

  4. Unions, federations and confederations of cooperatives

    Regulation: Article 79 Law 27/1999

    Cooperatives of any type and class may form companies, groups, consortia and unions among themselves, or with other physical or legal persons, public or private, and formalize agreements or arrangements, for the better fulfillment of their corporate purpose and for the defense of their interests.

    According to the provisions of article 36.b) of Law 20/1990 , these entities will pay corporate tax under the partially exempt entities regime regulated in Chapter XIV of Title VII of the LIS (to find out the specifics of partially exempt entities, see the section « Who is required to file a corporate tax return? » from Chapter 1 of this Practical Manual).