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V2260-16 24 May 2016 · SG de Impuestos sobre el Consumo Criterion in force
IVA · indemnización por clientela

Goodwill compensation and unpaid commissions are subject to VAT, but damages are not

A commercial agent enquired whether amounts received under a settlement agreement for commissions, goodwill compensation, and damages were subject to VAT. The DGT has determined that only the goodwill compensation and commissions form part of the tax base.

The question raised

Liability for Value Added Tax regarding the aforementioned operation.

The DGT's ruling

Compensation for goodwill constitutes consideration for services rendered and must include VAT in its taxable base. Unpaid commissions are also consideration for services subject to tax. In contrast, compensation for damages does not constitute consideration for an operation subject to VAT and must not include the tax.

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