Tax and Customs Authority
Tax Management Area - VAT
Circular-Letter No. 30159/2014, of 18 June 2014
Clarifying the legal framework in terms of Value Added Tax (“VAT”) applying to local undertakings, in light of the Legal Framework of Local Undertakings, set forth in Law No. 50/2012, of 31 August.
We highlight the following aspects of said Circular-Letter:
- Activities carried out by local undertakings in the scope of authority privileges are not subject to VAT;
- Financial consideration granted to local undertakings under programme- contracts, with a view to the pursuit of the tasks transferred to them , are quali- fied as financial allocations or operating subsidies, and do not take on the nature of consideration for a service, for which reason they are not subject to VAT;
- Provisions of services or the supply of goods under contracts awarded to local undertakings are subject to VAT under the general terms of the VAT Code.