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V0445-22 7 March 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · tipo impositivo

Renovations in elderly homes taxed at general 21% VAT rate

A local council asks about the applicable VAT rate for renovation works in an elderly home managed by a third party, and the deductibility of fees. The DGT states that such works are subject to the general VAT rate and outlines conditions for fee deductions.

The question raised

Type of Value Added Tax applicable to said works and the deductibility of the input tax incurred in their execution.

The DGT's ruling

Renovation and renewal works in the residence are taxed at the general rate of 21% as they are not considered construction or rehabilitation. The administrative concession for the operation of the residence is not subject to VAT. The deductibility of the input tax depends on whether it is allocated to taxable and non-exempt operations, applying a reasonable imputation criterion if mixed operations exist.

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