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A local council has requested clarification on whether wastewater transport and treatment services managed by a public commercial company are subject to VAT. The Directorate General for Taxes (DGT) ruled that the nature of the income and VAT liability depend on whether the service is managed directly by the Council or if the commercial company acts as the actual provider.
This ruling clarifies the distinction between municipal fees and VAT-liable services, affecting how public entities structure water management contracts and tax obligations.
The tax team reviews your specific situation.
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