Skip to content
Back to index
V0073-16 13 January 2016 · SG de Impuestos sobre el Consumo Criterion in force
IVA · ciclo integral del agua

Integrated water cycle services are subject to VAT even if the consideration is a fee

A commercial company owned by a Mancomunidad (association of municipalities) inquired whether water supply and sanitation services provided via fees were subject to VAT. The DGT ruled that these activities are subject to the tax as they constitute business activities involving water distribution.

The question raised

Liability of the operations carried out by the consulting company for Value Added Tax.

The DGT's ruling

Water distribution activities, including collection, supply, purification, sewerage, and treatment, are subject to VAT. This applies even if the consideration is of a tax nature or is carried out through management mandates. Therefore, water supply and sanitation services must charge the corresponding tax rate.

Book your free first meeting