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V2073-18 12 July 2018 · SG de Impuestos sobre el Consumo Criterion in force
IVA · sujeción

Services provided by a public entity to a dependent Administration are not subject to VAT

The Economic and Social Council of an Autonomous Community requested a ruling regarding the VAT liability of promotional services. The Directorate General for Taxes (DGT) ruled that services are not subject to VAT if provided to the Administration to which the entity belongs or to another fully dependent entity. However, VAT is applicable if services are provided to a Consortium that is not fully dependent on the same Administration.

The question raised

Question raised: Subjectivity of the described operations to Value Added Tax.

The DGT's ruling

Services provided by public sector entities to the Public Administration to which they belong, or to another entity entirely dependent upon it, are not subject to VAT when the latter holds full ownership of the same. This non-subjectivity extends to services provided between entities that are entirely dependent on the same Public Administration. However, if the recipient is not entirely dependent on the same Administration, the services shall be subject to the tax.

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