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V0938-18 10 April 2018 · SG de Impuestos sobre el Consumo Criterion in force
IVA · atención residencial

4% VAT rate applies to residential care if prices are set by the Administration via an administrative contract

The applicant inquired about the VAT rate applicable to residential care managed by a commercial company with prices established by a City Council. The DGT ruled that a 4% rate applies if the price is predetermined by the Administration within an administrative contract, whereas a 10% rate applies if it is a private, non-concerted arrangement.

The question raised

Value Added Tax rate applicable to the operation.

The DGT's ruling

A rate of 4% applies to residential care services defined in Law 39/2006 when provided through subsidized places or prices derived from an administrative contract where the Administration has set the rates. If the service is provided under a non-subsidized private regime with a freely agreed price, the rate is 10%. However, if the provision is carried out by entities under public law or private establishments of a social nature, the operation shall be exempt.

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