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New guides on the latest Spanish tax and immigration developments.
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A local council has enquired whether payments received from a community of woods, following an agreement to withdraw an appeal, are subject to VAT. The Directorate-General for Taxes (DGT) has ruled that they are, as the payment constitutes consideration for the service of adopting a specific course of action (withdrawing the appeal).
This ruling clarifies that settlements reached to terminate legal proceedings can be classified as taxable services if they involve a specific obligation or conduct.
The tax team reviews your specific situation.
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