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V0481-18 22 February 2018 · SG de Impuestos sobre el Consumo Criterion in force
IVA · tipo impositivo reducido

Construction of temporary hostel for members subject to 21% standard VAT rate

A federation consulted whether the construction of a hostel for its members in a sanctuary could qualify for the reduced VAT rate. The DGT ruled that, as it does not constitute a dwelling intended for residence or domestic life, the standard rate applies.

The question raised

Applicable tax rate for the execution of construction works for a hostel for the aforementioned uses.

The DGT's ruling

The reduced rate of 10% applies to the construction of buildings intended primarily for housing, understood as the dwelling or seat of domestic life of a person or family. For this rate to apply, more than 50% of the surface area must be intended for said use. A building intended for temporary accommodation during holidays does not meet the concept of housing and, therefore, is taxed at 21%.

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