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A local council has enquired whether the fixed annual amount paid to a concessionaire to cover the operating deficit of a swimming pool is subject to VAT. The Directorate-General for Taxes (DGT) has ruled that such a contribution constitutes a subsidy linked to the price and must be included in the taxable base.
This ruling clarifies that any financial support provided by a public entity to cover operating losses in a service concession is considered part of the consideration for the service, thereby increasing the VAT liability.
The tax team reviews your specific situation.
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