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V0823-19 16 April 2019 · SG de Impuestos sobre el Consumo Criterion in force
IVA · arrendamiento de vivienda

Rental of accommodation with hospitality services subject to 10% reduced rate VAT

A query was raised regarding whether the rental of a rural house including cleaning services, linen changes, and breakfasts is exempt from VAT. The DGT has determined that, as it provides complementary services characteristic of the hotel industry, the activity does not constitute an exempt residential lease, but rather a hospitality service subject to tax.

The question raised

Taxability of the activity to be carried out in the rural house and the applicable Value Added Tax rate.

The DGT's ruling

The lease of real estate ceases to be exempt from VAT when the lessor provides complementary services typical of the hotel industry, such as cleaning, laundry, or catering. In this case, the activity is considered a lodging service and not a mere rental of housing. As these are hospitality services, the reduced tax rate of 10% applies.

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