ECJ’s resolution (C-151/13). Concept of “subsidy directly linked to the price”
The article 73 of the VAT Directive provides the concepts involved in the VAT taxable base, where it is included the subsidies directly linked to the price of the transactions.
As part of the taxable base and, therefore, within the scope of the VAT, those type of subsidies shall be considered, in any case, for the figure to be stated as the denominator of the pro-rata fraction.
On the contrary, as regard the subsidies which are not linked to the price, those must be only considered in the pro-rata denominator when the national legislation provides for such term. Hence, it will be relevant to determine what subsidy is deemed as linked to the price and what not, in so far as its inclusion in the pro-rata denominator (for taxable persons with VAT deductions affected by the pro-rata) will affect to the assessment of this. It will be more harmful in case of a subsidy linked to the price, since this will increase the pro-rata denominator and, therefore, the VAT deduction reduced.
The resolution from the ECJ involves an entity performing exempt transactions due to sanitary supplies of services (private residence of healthcare) that receives a “healthcare lump sum”. Considering that such amount cannot be deemed as a subsidy directly linked to the price, it did rectify the pro-rata and the VAT returns, requesting a VAT refund.
In this sense, the ECJ concludes that, since there is a link between the supply of services and the consideration received, where it is included the “healthcare lump sum”, the latter shall be deemed as the consideration for the services rendered, thus being this concept within the scope of the VAT.
Consequently, even though the price is not individualized, the Court does link the amounts received to a supply of services, thus considering such amount as part of the consideration and, therefore, part of the taxable base.
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