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V1452-20 18 May 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · actividad empresarial

Regulatory Council functions are exempt from VAT, except for services in competition with the market

A Regulatory Council of a Protected Geographical Indication has requested clarification on whether its subsidies and fees are subject to VAT. The DGT ruled that functions assigned by Regulation do not constitute a business activity, although certain specific services may be subject to VAT.

The question raised

Question posed: Whether such subsidies and fees would be subject to Value Added Tax.

The DGT's ruling

The actions of a Regulatory Council in the performance of its regulatory functions do not constitute business or professional activities and are therefore not subject to VAT. However, services such as the rental of facilities, management, issuance of certificates, or training may be subject to tax if they compete with private agents. If such services are taxable, statutory fees for members are exempt, but services with independent pricing are not. Subsidies shall be subject to tax if they are directly linked to the price of transactions subject to the tax.

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