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A taxpayer has requested clarification on the timing of recognition for a grant received to cover business expenses. The Directorate General for Taxes (DGT) has ruled that, as the grant is intended for specific expenses, it must be recognised as income in the same tax year in which those expenses are incurred.
This ruling clarifies the principle of matching income and expenses for taxpayers under the direct estimation regime, ensuring that grants intended for specific costs are recorded in the same period as the costs themselves.
The tax team reviews your specific situation.
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