State grants for local public transport not subject to VAT, full input VAT deduction allowed.

• Federal Fiscal Court ruled that state grants to local public transport are not subject to VAT
• Municipality received grants for construction of landing stage for public ferry transport
• District grant was subject to VAT, state grant was non-taxable
• Municipality entitled to full input VAT deduction as taxable person
• State allocation was for structural policy reasons, not remuneration for services
• State grant was for general funding for transport infrastructure, not specific project
• Tax office’s objection to state allocation being subject to VAT was rejected by Federal Fiscal Court

Source: kmlz.de

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

---

---