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V1043-20 24 April 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · tipo reducido

10% reduced VAT rate applies to renovation works if materials do not exceed 40% of the taxable base

An appliance and kitchen furniture company has requested clarification on the applicable VAT rate for installation works involving masonry, plumbing, and electrical services. The DGT clarifies that these works may be subject to the 10% rate if they meet residential renovation requirements; however, appliances will always be taxed at the standard 21% rate.

The question raised

Applicable tax rate for the sale of household appliances and kitchen and bathroom furniture, when it is not carried out within the framework of a general renovation project and includes only the masonry, flooring, plumbing, and electrical works necessary for their installation.

The DGT's ruling

Renovation and repair works in dwellings may apply the reduced rate of 10% if the recipient is an individual or a community of owners, the dwelling is more than two years old, and the cost of the materials provided does not exceed 40% of the taxable base. Kitchen furniture and countertops are considered provided materials if they are incorporated into the building. However, the supply of household appliances shall always be taxed at the general rate of 21%, even if carried out jointly with renovation works.

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