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An individual has requested clarification on the VAT rate applicable to the purchase of materials intended for the completion of a residential property. The Directorate General for Taxes (DGT) has ruled that, although the construction work itself may qualify for a reduced rate, the supply of materials by providers to the developer is subject to the standard VAT rate.
This ruling clarifies that the reduced VAT rate for residential construction does not extend to the initial supply of materials to developers, which remains subject to the standard rate.
The tax team reviews your specific situation.
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