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V0989-19 8 May 2019 · SG de Impuestos sobre el Consumo Criterion in force
IVA · tipo impositivo reducido

10% reduced VAT rate applicable to home repairs if the recipient is the insured party

A query was raised regarding the VAT rate applicable to home repairs when the insurance company pays via reimbursement. The DGT ruled that the 10% reduced rate applies if the recipient is the insured party or the homeowners' association, provided all legal requirements are met.

The question raised

Tax rate applicable to repairs in private dwellings when the invoice is issued to the insured party and the payment is made via reimbursement by the insurer.

The DGT's ruling

The reduced rate of 10% is applicable if the actual recipient is the natural person who uses the dwelling for private use or the community of owners. In the indemnity system, the insured party is the recipient even if the insurer makes the material payment. The invoice must identify the insured party as the recipient, regardless of who pays. If the insurer replaces the indemnity with direct repair, the recipient is the insurer and the general rate of 21% shall apply.

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