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V1923-23 ·5 July 2023 ·consulta-vinculante Medium impact
Tax

Compensation for contract termination may be subject to VAT if it is not compensation for damages

A company inquired whether the payment received for the termination of a photovoltaic plant construction contract was subject to VAT. The DGT explains that if the payment compensates for damages, it is not subject to VAT, but if it is for the waiver of rights or is linked to the operations of the contract, it is subject to VAT.

In 6 key points

Lifecycle

2023-07-05PublishedPublished in the BOE
Official text Based on BOE data (boe.es). Information, not advice.

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This analysis is informational only and does not constitute legal advice or create a client-adviser relationship. BM Consulting.
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