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A developer has enquired whether the reduced VAT rate can be applied to the construction of a building intended for more than 50% residential rental, even if the project and license indicate a lower percentage. The Directorate-General for Tax (DGT) has ruled that the reduced rate is not applicable because the project and the license show a residential use of less than 50%.
Developers must ensure that both the technical project and the building license explicitly reflect a residential use of at least 50% to qualify for the reduced VAT rate on construction works.
The tax team reviews your specific situation.
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