- Subsidy and VAT Tax Base Dispute: A Polish passenger transportation company receives a subsidy from the local government to cover operational losses, arguing that this compensation does not increase the VAT tax base, while tax authorities claim it does affect the pricing of services provided.
- Legal Reasoning: Advocate General Kokott suggests that whether the subsidy triggers VAT depends on the nature of the benefit provided. If the subsidy compensates for general public benefits rather than specific services rendered to the organizer, it may not be considered a taxable transaction. The key factor is whether the subsidy directly correlates with a specific benefit or service.
- Conclusion on Subsidy Impact: The analysis concludes that the subsidy does not affect the price of specific transportation services, as it is calculated based on vehicle kilometers and not tied to individual transactions or passengers. Therefore, the subsidy serves a general public interest rather than providing a specific consumable benefit to the grantor, suggesting it should not increase the VAT tax base.
Source Pawel Mikula
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