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V0228-16 21 January 2016 · SG de Impuestos sobre el Consumo Criterion in force
IVA · tipo impositivo reducido

10% reduced VAT rate applies to renovation works contracted directly by the developer

A consulting company acting as a contractor for residential renovation works subcontracts parts of the project. The DGT has ruled that the 10% reduced rate applies to the direct relationship between the developer and the contractor, but does not extend to subcontractors.

The question raised

Applicable tax rate for both the operations carried out by the consultant for the developer and those received from each of the subcontractors involved.

The DGT's ruling

Works executed through direct agreements between the developer and the contractor for the rehabilitation of dwellings are taxed at 10%. This reduced rate applies regardless of whether the developer contracts a single entrepreneur or several. However, works carried out by subcontractors for other contractors are taxed at the general rate of 21%.

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