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V2079-24 ·25 September 2024 ·consulta-vinculante Medium impact
Tax

Local council acts as entrepreneur in care home management, but service is subject to and exempt from VAT

A local council has requested clarification on whether VAT should be included in the public fees for a residential care home managed via a service contract. The DGT has determined that the council acts as an entrepreneur and that the service is subject to, but exempt from, VAT. Meanwhile, the contractor must apply the reduced rate of 4% provided they meet the requirements of Law 39/2006.

In 6 key points

How it affects those involved

This ruling clarifies the VAT status for local authorities managing social services through service contracts, distinguishing between the council's role as an entrepreneur and the specific tax treatment of the care services provided.

Lifecycle

2024-09-25PublishedPublished 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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