NPOs regularly receive grants from national or European public authorities. The latter intend to finance activities deemed to be in the public interest, and the recipient of the subsidies is responsible for justifying the use of the funds received and for monitoring their use.
Obtaining subsidies will essentially raise two questions in regards to VAT:
– Should the grant be subject to VAT?
– Does the grant influence the association’s right to deduct VAT?
Source: vatdesk.eu
