- The German Federal Fiscal Court ruled that state grants for local public transport are not subject to VAT.
- The ruling allowed municipalities to keep the full grant without paying VAT and did not reduce input VAT deduction.
- The ECJ case C-615/23 involved a Polish public transport company receiving loss compensation payments.
- The ECJ concluded that these compensation payments are not subject to VAT as they do not constitute consideration from a third party.
- The ECJ specified that a subsidy is subject to VAT only if it is directly linked to the price of a specific supply, enables a lower price, and its remuneration is determinable.
- The compensation payment in the Polish case did not directly affect ticket prices and was not linked to specific transport services.
- The subsidy was based on the number of kilometers covered, not on the number of passengers or service intensity.
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.
