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A heat and hot water production cooperative enquired whether it could apply the reduced 5% VAT rate to its energy supplies following the temporary reduction of rates for fuels. The Directorate-General for Taxes (DGT) ruled that while the 5% reduced rate applies to the delivery of pellets, it does not apply to the heating supply service that uses said pellets as fuel.
This ruling clarifies that heating services are distinct from fuel deliveries, meaning they do not qualify for the reduced VAT rate applied to specific fuels like pellets.
The tax team reviews your specific situation.
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