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V0210-21 10 February 2021 · SG de Impuestos sobre el Consumo Criterion in force
IVA · asistencia técnica

Irrigation management services may be subject to 10% VAT if classified as technical assistance

A company requested clarification on the VAT rate applicable to sprinkler irrigation management (determining water volume and timing). The DGT ruled that if the service constitutes technical assistance for farm operators, the reduced rate of 10% applies; otherwise, the standard rate of 21% applies.

The question raised

Tax rate applicable for Value Added Tax purposes to the aforementioned operations.

The DGT's ruling

To apply the reduced rate of 10%, the service must constitute technical assistance provided to holders of agricultural, forestry, or livestock holdings and be necessary for their development. Technical assistance involves the preparation of studies or projects of a technical nature. If irrigation management does not fall under technical assistance, the tax rate of 21% shall apply.

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