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V1045-18 25 April 2018 · SG de Impuestos sobre el Consumo Criterion in force
IVA · base imponible

Local authority contributions for bullfighting events subject to VAT as consideration for services

A company requested clarification on whether annual contributions made by a local authority for bullfighting events should be subject to VAT. The Directorate-General for Taxes (DGT) ruled that, as there is a direct link between the payment and the services provided, the amount constitutes consideration subject to the tax.

The question raised

Whether the amount of the subsidy should be understood to include Value Added Tax or, where applicable, whether the tax must be charged on the amount thereof.

The DGT's ruling

The economic contribution from the City Council to the concessionaire, intended for the subcontracting of festivities, constitutes the consideration for services rendered to the City Council. As there is a direct relationship between the payment and the holding of the festivities, the transaction is subject to VAT. Therefore, the company must charge the tax on the invoice issued to the City Council.

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