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V0535-14 28 February 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · tipo impositivo reducido

4% reduced rate does not apply to care services without administrative price control or formal agreements

An entity providing home help and residential care services to religious institutions has queried whether it can apply the reduced 4% VAT rate. The Directorate General for Taxes (DGT) has ruled that this rate only applies if the services are subject to formal agreements or if prices are fixed through an administrative contract.

The question raised

Possible application of the 4 percent tax rate to the operations carried out by the consulting entity for the religious congregations and institutions with which it contracts the aforementioned services.

The DGT's ruling

The 4% rate applies to telecare, home help, day/night center, and residential care services defined in Law 39/2006, provided they are provided in contracted places or through prices derived from an administrative contract where the Administration sets the rates. The 4% rate does not apply to the non-contracted private regime with freely agreed prices. It also does not apply if the services are for the prevention or promotion of personal autonomy.

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