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A hotel company has requested clarification on whether payments received from a manager to guarantee a minimum level of profitability are subject to VAT. The Directorate General for Taxes (DGT) has ruled that such amounts constitute consideration for the transfer of exploitation rights and must be taxed at the standard rate.
This ruling clarifies that guarantees of minimum returns in management contracts are not mere financial adjustments but are part of the service consideration, necessitating the application of VAT.
The tax team reviews your specific situation.
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