Subsidy as an institution increasing the tax base for taxon goods and services – theory and practice

Abstract

This study is devoted to the issue of subsidies that may increase the tax base for goods and services tax. Subjectspecificsubsidies or subsidies intended to cover operating costs may have a certain impact on the price of theservices or goods supplied, but ultimately they will not be taken into account in the tax base. Therefore, a thoroughanalysis is needed to decide whether in a given case the subsidy is a benefit that reduces the price or a benefitthat is intended to compensate for the estimated lower amount of revenue. The aim of this study is to attempt ageneral assessment of how to determine that a specific subsidy is included in the basis for calculating the tax ongoods and services.