Spain’s Supreme Court: Public Service Subsidies Not Subject to VAT, Aligns with EU Ruling

• Spain’s Supreme Court ruled that subsidies for public services not linked to service prices are not subject to VAT.
• The case involved a transport company in La Rioja receiving subsidies to cover operating deficits.
• Lower courts had ruled the subsidies taxable, but the Supreme Court disagreed, citing EU case law.
• The court found no direct link between subsidies and service prices, aligning with EU jurisprudence.
• This decision provides legal certainty for operators managing public services with subsidies.

Source: bdo.global

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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