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V1436-20 14 May 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · tipo reducido

10% VAT rate applies to peat if suitable for agricultural use and classified as fertiliser or soil improver

A local council has requested clarification on the VAT rate applicable to peat purchased for its greenhouses. The Directorate General of Taxes (DGT) has ruled that the reduced rate of 10% applies only if the product is suitable for agricultural or forestry activities and is classified as a fertiliser, organic waste, soil conditioner, or soil improver.

The question raised

Value Added Tax rate applicable to the peat referred to in the consultation request.

The DGT's ruling

The reduced rate of 10% applies to peat if it meets two requirements: being considered a fertilizer, organic waste, corrector, or amendment, and being capable of being used directly, habitually, and appropriately in agricultural, forestry, or livestock activities due to its characteristics, packaging, or presentation. If the peat has a mixed use or is suitable for gardening without a business purpose, the general rate of 21% shall apply.

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