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V3072-14 11 November 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · entidad de carácter social

Museum admissions managed by a municipal commercial company are subject to VAT

A City Council has requested clarification on the VAT treatment for a new commercial company established to manage museums, shops, and sponsorships. The Directorate General for Taxes (DGT) ruled that admissions and sales are subject to VAT because the company is not a social entity. Furthermore, sponsorships are also taxable if the entity is not registered under Law 49/2002.

The question raised

Treatment for Value Added Tax purposes.

The DGT's ruling

The sale of tickets and goods in shops are transactions subject to VAT because the commercial company does not meet the requirements of a social entity for the exemption. Sponsorship services are also subject to the tax if the receiving entity is not a beneficiary of the regime under Law 49/2002. Municipal subsidies shall form part of the tax base if they are directly linked to the price of the transactions. The company may deduct the input VAT to the extent that its transactions are taxable and not exempt.

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