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V0915-16 10 March 2016 · SG de Impuestos sobre el Consumo Criterion in force
IVA · exención

Early childhood care services may be VAT exempt if classified as healthcare or social assistance

A query was raised regarding whether early childhood care services provided by a multidisciplinary team qualify as exempt healthcare services or exempt social assistance services. The DGT indicates that healthcare exemption depends on whether the services involve the diagnosis, prevention, or treatment of diseases and are provided by healthcare professionals, whereas social assistance exemption requires the provider to be a social welfare establishment.

The question raised

Question posed: Classification of said activity as a healthcare activity for the purposes of applying the exemption contained in Article 20.One.3º of Law 37/1992, or its inclusion in social activities under Article 20.One.8º.

The DGT's ruling

Medical, surgical, or healthcare assistance services for the diagnosis, prevention, or treatment of diseases are exempt if provided by medical or healthcare professionals (including clinical psychologists, physiotherapists, and speech therapists), even if acting through a company. The social assistance exemption under Article 20.One.8º applies if the provider is a non-profit social establishment. If these requirements are not met, the reduced rate of 10% shall apply if the provider is not a social establishment, or the general rate of 21% in other cases.

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