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V0487-22 10 March 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · concesión administrativa

Administrative concession for the operation of a nursing home is not subject to VAT

A query was raised regarding whether the monthly fee paid by a company to a City Council for the management of a nursing home is subject to VAT. The DGT has determined that, as it constitutes a public service management contract, the concession is not subject to the tax.

The question raised

It is questioned whether the fee that the company awarded the administrative concession pays monthly to the City Council as consideration for the management of the service is or is not subject to Value Added Tax, based on Article 7.9 of Law 37/1992 which regulates it.

The DGT's ruling

The administrative concession for the operation of a nursing home is not subject to VAT, therefore the tax must not be charged on the fee paid by the concessionaire. This is due to the fact that the contract is classified as a public service management, as it is a center that the Administration offers generically to its constituents. Therefore, the general rule of taxation does not apply, but rather the exclusion provided for in Article 7.9 of Law 37/1992.

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