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V1001-22 5 May 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · base imponible

Catalan water levy excluded from VAT taxable base

A Catalan local council has requested clarification on whether the water levy established in Catalonia should be included in the VAT taxable base. The Directorate General of Taxes (DGT) has ruled that, as the levy itself is not subject to tax, it is neither subject to VAT nor should it be included in its taxable base.

The question raised

Whether the water levy established in Catalonia must be included in the tax base for Value Added Tax purposes.

The DGT's ruling

The Catalonia water levy is not subject to VAT because the distribution of water is not the same operation as the actual or potential use of water. As the taxable events do not coincide, Article 78.Two.4º of Law 37/1992 is not applicable. Therefore, the levy must not be included in the tax base of operations subject to VAT. This pronouncement represents a change in criterion regarding the previous position of the DGT.

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