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V0115-17 20 January 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · comunidad de regantes

Water distribution and commercialisation by irrigation communities may be subject to VAT

An irrigation community has requested a ruling on whether passing on investment costs to its members is subject to VAT. The DGT has determined that the distribution and commercialisation of water constitutes a taxable operation, whereas operations related to water management and use are not.

The question raised

Impact of the Tax due to the imputation of the cost of investments made by them to the members.

The DGT's ruling

Water distribution and marketing operations carried out for consideration by irrigation communities are subject to VAT, as they are not considered water management or exploitation. Conversely, water management and exploitation operations are not subject to the tax. Likewise, the rebilling of expenses derived from water management and exploitation operations is not subject to VAT.

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