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V3064-23 23 November 2023 · SG de Impuestos sobre el Consumo Criterion in force
IVA · subvenciones vinculadas al precio

School transport subsidies are exempt from VAT and erroneous charges may be rectified

A regional government department has requested clarification on whether contracted school transport services are subject to VAT and how to rectify any undue charges. The DGT has ruled that subsidies for this service do not constitute consideration subject to tax and that if incorrect amounts have been charged, any rectification method may be used.

The question raised

Liability for Value Added Tax on the transport services received by the applicant. In the event that they are not subject to tax, the procedure for rectifying incorrectly accrued amounts.

The DGT's ruling

Subsidies for public school transport are not considered linked to the price nor do they form part of the consideration subject to VAT, as there is no distortion of competition. If commercial entities have erroneously charged the tax, they may rectify the amounts through the procedure for the refund of undue payments or by regularizing them in subsequent returns. Regarding deduction, if the entity carries out exclusively taxable and non-exempt operations, it may deduct the input VAT incurred on its acquisitions.

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