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V0010-18 6 January 2018 · SG de Impuestos sobre el Consumo Criterion in force
IVA · tipo impositivo reducido

10% reduced VAT rate applies to home repairs when the recipient is the insured party

A query was raised regarding whether repairs to homes covered by insurance policies can be taxed at the 10% VAT rate when the insurer reimburses the cost. The DGT ruled that the reduced rate applies if the actual recipient is the insured party or the community of owners, provided all legal requirements are met.

The question raised

Tax rate applicable to repairs in private dwellings when the invoice is issued to the insured party and payment is made via reimbursement by the insurer.

The DGT's ruling

The reduced rate of 10% is applicable if the legal and material recipient of the service is the natural person or the community of owners using the dwelling. Under the indemnity system, the insured party must contract the repair and the invoice must be issued in their name, regardless of who makes the material payment. For the insured party to be the recipient, their consent must exist in the contracting process, for example, through the acceptance of a quote. The reduced rate shall not apply if the claims management platform undertakes to guarantee repairs or prices to the insurer, as the recipient would then be the insurer.

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