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V0204-21 9 February 2021 · SG de Impuestos sobre el Consumo Criterion in force
IVA · tipo impositivo reducido

4% VAT rate applies if the economic consideration exceeds 10% of the price excluding VAT

A query was raised regarding whether, to apply the reduced 4% VAT rate to day care services, the economic consideration should be compared against the total price including or excluding VAT. The DGT ruled that the comparison must be made against the service amount excluding VAT.

The question raised

Whether, for the application of the 4 percent tax rate provided for in Article 91.Two.2.3º of Law 37/1992, the comparison of the amount of the economic benefit must be made against the total amount charged by the Day Center, including VAT, or only against the amount, excluding VAT.

The DGT's ruling

To apply the 4% rate to telecare, home help, day or night center, or residential care services, the linked economic benefit must cover more than 10% of the service price. For the purposes of this calculation, the reference to the price must be made to the amount of the respective service, excluding Value Added Tax.

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