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A carpentry company has enquired whether the installation of doors, windows, and kitchen furniture can qualify for the reduced 10% VAT rate. The Directorate General for Taxes (DGT) has ruled that such works may apply the reduced rate provided they meet the requirements for home renovation and the cost of materials does not exceed 40% of the taxable base.
This ruling clarifies the threshold for applying the reduced VAT rate to renovation works involving furniture, impacting how carpentry businesses must calculate and invoice material versus labour costs.
The tax team reviews your specific situation.
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