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A foundation housing families of paediatric patients has enquired whether it can apply the reduced VAT rate to the construction of a new building if it decides to charge a reduced fee for accommodation. The Directorate General for Taxes (DGT) has ruled that construction will be subject to the reduced rate if more than 50% of the floor area is residential, regardless of whether the use is free of charge or involves consideration.
The tax team reviews your specific situation.
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