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V2102-22 ·3 October 2022 ·consulta-vinculante Medium impact
Tax

Subcontractor material costs are calculated based on the main contractor's purchase price, regardless of subcontracting material percentage

A company requested clarification on how to calculate material costs in renovation works to determine whether the reduced 10% or general 21% VAT rate applies. The Tax Agency responded that to calculate the 40% limit, all materials must be included, including those from subcontractors, using their acquisition price.

In 6 key points

How it affects those involved

This ruling clarifies the calculation of the material cost threshold for VAT rate application in construction, ensuring that all materials used in a project are accounted for via the main contractor's costs, which may affect the eligibility for the reduced VAT rate.

Lifecycle

2022-10-03PublishedPublished 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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