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V1984-23 7 July 2023 · SG de Impuestos sobre el Consumo Criterion in force
IVA · subvención vinculada al precio

VAT applicability of a subsidy depends on whether it is directly linked to the price of operations

A foundation has requested clarification on whether a subsidy from a public consortium is subject to VAT and if it should be included in the calculation of its pro rata deduction. The DGT indicates that applicability will depend on whether a direct link exists between the subsidy and the price of the services provided.

The question raised

Whether said subsidy would be subject to Value Added Tax and whether it should be included in the calculation of the tax deduction pro rata.

The DGT's ruling

If the subsidy is directly linked to the price of the operations, it shall form part of the taxable base and shall be subject to VAT. In that case, the subsidy shall be included in the calculation of the deduction pro rata. If the subsidy is not linked to the price, for example to finance the fixed structure or assets, it shall not be subject to the tax and shall not be included in the pro rata.

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