It is important that contracts / grants are designed and entered into in a way that ensures the individual educational institution against involuntarily ending up in a situation where VAT reduces the expected income.
For the Tax recipients
If the recipient of the delivery does not have the right to deduct the VAT, for example funds and associations, a grant or a subsidy will often have to include the VAT. If this has not been included in the project planning, the educational institution may risk having to settle VAT on the grant and will thus lack 20% of the funding for the project. For calculating sales tax calculator zip code this is essential now.
In order to determine whether a subsidy is subject to VAT, it is necessary to assess whether there is a “supply for consideration”. This applies both in a two-party situation (grantor and educational institution) and … Read More