EU Court Confirms: Public Transport Compensation Exempt from VAT

• The European Court of Justice ruled that compensations paid to public transport operators are not subject to VAT.
• The ruling was issued on May 8, 2025, in case C-615/23.
• The case involved the Director of National Tax Information against P. S.A. regarding VAT on compensations paid by local government units.
• The court confirmed the arguments presented by the Advocate General.
• The compensation does not directly affect the price of transport services, which is set by the organizer.
• The main purpose of the compensation is to cover losses related to transport activities, not to finance specific services.
• Compensation is not paid specifically for providing transport services to a particular customer.
• It is granted retrospectively and calculated based on vehicle kilometers, not the identity or number of service users.
• The court emphasized that the impact of compensation on the final price does not determine its inclusion in the VAT base.

Source: crido.pl

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.

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