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V0672-20 3 April 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · base imponible

Grants for promotional campaigns fall within VAT base

A Regulatory Council of a Protected Designation seeks clarification on whether promotional campaign grants are subject to VAT. The DGT responds that such grants, being directly linked to the price of promotional services, form part of the taxable base.

The question raised

Whether said subsidies would be subject to Value Added Tax and, where applicable, their deductibility, taxable base, and accrual.

The DGT's ruling

The inherent functions of the Regulatory Council are not subject to VAT as they do not constitute a business activity. However, promotional campaigns are subject activities. Subsidies intended for these campaigns are considered directly linked to the price when established based on the volume of services provided, thereby integrating into the taxable base. The tax is accrued when the taxable operations are executed.

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