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V0756-19 3 April 2019 · SG de Impuestos sobre el Consumo Criterion in force
IVA · empresario

VAT liability on services provided by public business entities and transfers from administrations

The DGT states that services to users are subject to VAT, and municipal transfers may be taxable if considered price-linked subsidies.

The question raised

Whether transfers received from the City Council must form part of the taxable base for Value Added Tax. Whether non-tax public income received by the taxpayer from users of the various services provided is subject to Value Added Tax. The deductibility regime applicable to the taxpayer.

The DGT's ruling

The entity holds the status of a taxable person and its services to users are subject to VAT as a non-taxable consideration is received. Transfers from the City Council shall be included in the taxable base if they are considered subsidies linked to the price, that is, if a direct link exists between the contribution and the service provided. Contributions intended to finance the general activity or the structure of the company shall not be included in the taxable base. For deduction purposes, a reasonable and homogeneous imputation criterion must be applied to expenses intended for both taxable and non-taxable operations.

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