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V0871-16 9 March 2016 · SG de Impuestos sobre el Consumo Criterion in force
IVA · concesión administrativa

Administrative concession for the operation of a municipal gym is not subject to VAT

A City Council consulted whether VAT should be applied to the amount payable by the successful bidder for the operation of a municipal gym. The DGT ruled that, as it constitutes an administrative concession for the management of public services, the operation is not subject to the tax.

The question raised

Liability for Value Added Tax on the amount to be paid by the successful bidder to the inquiring City Council.

The DGT's ruling

If the contract is classified as the management of public services under the administrative concession modality, the operation is not subject to VAT pursuant to Article 7.9 of Law 37/1992. For a concession to exist, the entrepreneur must manage the service at their own risk and venture, assuming the risk of loss. The amount of remuneration must be linked to the management, demand, or availability of the service.

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