Transport operators shall not apply VAT to price reduction subsidies

The recent interpretation by the Directorate General of Taxes (DGT) regarding the tax treatment of public aid destined for the transport sector has defined the classification of the subsidies provided for in Royal Decree-law 1/2025. These contributions seek to compensate for the reduction in revenue and the increase in costs derived from the lowering of prices in urban and interurban transport services.

What the DGT has resolved

The advisory body has determined that these aids do not constitute price-linked subsidies. According to the established criteria, as no significant distortion of competition occurs in this public service, said contributions do not form part of the consideration for any operation subject to Value Added Tax (IVA). Consequently, the collection of these aids is not subject to the tax.

The resolution is based on Law 37/1992 on VAT and Royal Decree-law 1/2025, establishing that these amounts should not be included in the taxable base of transport operations because there is no causal link that makes them part of the service price.

What it means for you

For transport operators, this resolution has two direct implications:

• No VAT burden: The aid received to compensate for the decrease in revenue must not be invoiced with VAT, which avoids an artificial increase in the amount of the subsidy.
• Right to deduction: Operators may deduct the VAT incurred on their acquisitions and expenses, provided they carry out exclusively operations subject to the tax.

What should be done

It is necessary for companies in the sector to verify the nature of the aid received to ensure that their accounting and tax treatment complies with this DGT criterion. Since the deductibility of VAT incurred depends on the performance of taxable operations, it is recommended to assess the specific situation of each operator and the composition of their activity to avoid errors in the tax settlement.