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A company owned by a local council has requested clarification on whether the tax relief provided under Article 34 of the Corporate Tax Act applies to industrial land development. The Directorate General for Taxes (DGT) has ruled that such activity does not qualify as a municipal public service under the Law Regulating the Bases of Local Regime.
This ruling limits the ability of local government-owned companies to access significant tax relief for commercial land development activities, reinforcing the strict distinction between municipal public services and commercial ventures.
The tax team reviews your specific situation.
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