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A local council has requested clarification on the VAT rate applicable to peat purchased for its greenhouses. The Directorate General of Taxes (DGT) has ruled that the reduced rate of 10% applies only if the product is suitable for agricultural or forestry activities and is classified as a fertiliser, organic waste, soil conditioner, or soil improver.
This ruling clarifies the tax treatment for peat products, ensuring that the reduced VAT rate is strictly contingent on the product's functional classification for agricultural or forestry use.
The tax team reviews your specific situation.
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