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A bathroom renovation company enquired about the applicable VAT rate when providing materials. The DGT ruled that the 10% reduced rate may be applied provided that the cost of the materials supplied does not exceed 40% of the transaction's taxable base.
This ruling clarifies the threshold for applying the reduced VAT rate in renovation projects, impacting how contractors must calculate and document material costs versus labour to ensure tax compliance.
The tax team reviews your specific situation.
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