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V1149-17 12 May 2017 · SG de Impuestos Especiales y de Tributos sobre el Comercio Exterior Criterion in force
OTRO · impuesto especial sobre la electricidad

Domestic water supply is an industrial activity for Electricity Tax reduction, but sewerage is not

A local council has requested clarification on whether its water supply and sewerage services qualify as industrial activities to apply a reduction to the taxable base of the Special Tax on Electricity. The Directorate General for Taxes (DGT) has ruled that water supply does qualify, but sewerage and water treatment do not.

The question raised

Possibility of applying for the tax benefit established in letter f) of article 98 of Law 38/1992, of December 28, on Special Taxes.

The DGT's ruling

To identify industrial activities for Electricity Tax purposes, divisions 1, 2, 3, and 4 of the IAE are used. The supply of water (collection, treatment, and distribution) is classified under division 1 (heading 161.1), and is therefore an industrial activity. However, sewerage and wastewater treatment services belong to division 9 (heading 921.4) and are not considered an industrial activity.

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