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A local council has requested clarification on whether subsidies granted to a concessionaire to cover the deficit of an urban transport service should be included in the VAT taxable amount. The Directorate General for Taxes (DGT) has ruled that, as there is no distortion of competition, these contributions are not considered price-linked subsidies.
This ruling clarifies that subsidies intended to cover operating losses in public transport do not constitute part of the consideration for the service, thereby excluding them from the VAT taxable base.
The tax team reviews your specific situation.
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