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A query was raised regarding whether the 40% material cost limit for applying reduced VAT to HVAC works should be calculated per supplier or on the total cost of the project. The DGT ruled that the limit applies individually to each contractor's execution of the works.
Contractors involved in renovation and repair works must ensure that the cost of materials provided does not exceed 40% of the total taxable amount per individual contract to qualify for the 10% reduced VAT rate.
The tax team reviews your specific situation.
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