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V1160-24 ·23 May 2024 ·consulta-vinculante Medium impact
Tax

HVAC and energy efficiency installations subject to 21% VAT if material costs exceed 40%

A company specialising in HVAC and energy efficiency installations has requested clarification on the applicable VAT rate for its works. The DGT has clarified that, unless they are part of a comprehensive renovation, the reduced rate of 10% can only be applied if the cost of materials does not exceed 40% of the taxable base.

In 6 key points

How it affects those involved

Companies in the HVAC and energy efficiency sectors must carefully monitor the ratio of material costs to labour to ensure correct VAT application, as exceeding the 40% threshold triggers the standard 21% rate.

Lifecycle

2024-05-23PublishedPublished in the BOE
Official text Based on BOE data (boe.es). Information, not advice.

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This analysis is informational only and does not constitute legal advice or create a client-adviser relationship. BM Consulting.
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