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V0435-18 20 February 2018 · SG de Impuestos sobre el Consumo Criterion in force
IVA · recargo de equivalencia

Air conditioning units subject to general VAT regime rather than equivalence surcharge

A partnership of assets has requested a ruling on whether the sale of air conditioning units is subject to the equivalence surcharge and who the taxable person is regarding their installation. The DGT has ruled that these units are considered construction materials excluded from said regime and has analysed the reverse charge mechanism for the taxable person in construction works.

The question raised

1. Application of the special surcharge on equivalence regime to the commercialization of said air conditioning units or, where applicable, application of the general Value Added Tax regime. 2. Taxable person in the installation of air conditioning.

The DGT's ruling

Air conditioning units are considered construction materials and, therefore, are excluded from the surcharge on equivalence regime, being taxed under the general VAT regime. The supply and installation of air conditioning is considered the execution of a work. If the installation is the result of a direct contract between the developer and the contractor for construction or renovation, the reverse charge mechanism and the reduced rate of 10% apply. In the event of subcontracting or isolated contracts, the general rate of 21% shall apply.

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