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An individual operating a taxi service has requested clarification on how to tax a subsidy received to maintain their business during COVID-19. The Directorate General for Taxes (DGT) has ruled that the aid constitutes income from economic activities and must be recognised according to its purpose and the specific accounting method applied.
This ruling clarifies the tax treatment of business support grants, ensuring they are integrated into the taxpayer's business income rather than being treated as other types of income, which affects the calculation of the net profit for tax purposes.
The tax team reviews your specific situation.
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