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V1339-17 31 May 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · ejecución de obra

Periodic garden maintenance subject to 21% VAT rather than 10% reduced rate

A landscaping company enquired whether services provided to homeowners' associations could qualify for the 10% reduced VAT rate. The DGT ruled that periodic maintenance constitutes a provision of services rather than the execution of a work, meaning the standard rate applies.

The question raised

Applicable tax rate for the specified gardening services performed for homeowners' associations and, in particular, whether the reduced rate of article 91.Uno.2.10º of Law 37/1992 is applicable to them.

The DGT's ruling

Periodic gardening maintenance operations are service provisions and are taxed at 21%. Only the execution of works for the renovation or repair of gardens may apply the reduced rate of 10% if the requirements of Law 37/1992 are met. To this end, the work must aim for a future result and not be of successive performance, and the cost of the incorporated materials must not exceed 40% of the taxable base.

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