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A municipal commercial entity has enquired whether the provision of water supply and sanitation services to a public consortium is eligible for the reduced VAT rate. The Directorate General for Taxes (DGT) has ruled that these operations are subject to VAT and are entitled to the 10% reduced rate.
This ruling clarifies the tax treatment for municipal entities providing water services, confirming their eligibility for the 10% reduced VAT rate when dealing with public consortia.
The tax team reviews your specific situation.
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