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An urban transport concessionaire has queried whether subsidies received from the City Council are subject to VAT. The DGT has ruled that, as it is an essential service where no real or potential competition exists, the subsidies are not considered linked to the price and therefore do not form part of the taxable base.
This ruling clarifies that subsidies for public transport services without competition do not increase the taxable base for VAT purposes.
The tax team reviews your specific situation.
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