What does 'taxes less subsidies' actually mean? It feels like it is grammatically incorrect. I have assumed it to just mean taxes minus subsidies.
You are correct, that it is taxes less subsidies = taxes - subsidies or in another word net tax for some particular product. For example, following OECD:
Taxes Less Subsidies On Products: Net taxes on products (net indirect taxes) are the sum of product taxes less subsidies. Product taxes are those taxes payable by producers that relate to the production, sale, purchase or use of the goods and services. Subsidies are grants on the current account made by general government to private enterprises and unincorporated public enterprises. The grants may take the form of payments to ensure a guaranteed price or to enable maintenance of prices of goods and services below costs of production, and other forms of assistance to producers.
Of course, you can extend the definition outside taxes for just products I just wanted to showcase an example of more detailed definition.
As to its grammatical correctness, English is my 2nd language and this is economics site not site on English language - but you will commonly see 'taxes less subsidies' used all across academic literature. It might appear grammatically incorrect as it is part of the jargon, so of course this is not the way how laymen might discuss taxes.