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A lawyer who only practices through the legal aid system inquires whether they must file VAT returns. The DGT responds that their services are not subject to the tax and, therefore, there is no obligation to file tax returns if no other taxable activities are performed.
Question raised: Whether there is an obligation to file a VAT return.
Legal aid services provided by lawyers and solicitors are not subject to VAT because the amounts received are compensatory in nature and do not constitute consideration. By performing exclusively non-taxable operations, the professional is not considered an entrepreneur or professional for tax purposes and is not obliged to file tax returns, unless they perform other taxable services.
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