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V0801-14 24 March 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · base imponible

4% VAT rate applies to care services if price is controlled by the Administration or coverage exceeds 75%

A home care company has requested clarification on the applicable VAT rate when a service is partially funded by a government benefit. The DGT has ruled that the reduced 4% rate applies if the price is pre-established by an administrative contract or if the financial aid covers more than 75% of the price.

The question raised

Taxable base. - Applicable tax rate.

The DGT's ruling

The 4% rate applies to telecare services, home help, day/night centers, and residential care defined in Law 39/2006. To this end, they must be contracted places or services with prices established through an administrative contract for the management of public services. The 4% rate also applies if the service is financed by a linked economic benefit that covers more than 75% of its price. If these requirements are not met, the 10% rate shall apply.

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