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V1610-14 20 June 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · asistencia social

Social assistance services provided by commercial entities subject to 10% VAT

A query was raised regarding whether a company conducting socio-educational activities for the elderly could apply the social assistance exemption or the reduced VAT rate. The DGT ruled that, as a commercial entity, it cannot be considered a social entity for the purpose of the exemption; however, if the activity is classified as social assistance, the 10% VAT rate applies.

The question raised

Clarification is requested regarding the previous inquiry as to whether the company is of a "social nature" and whether the activity performed is of "social assistance", and whether the applicable rate is 10 percent.

The DGT's ruling

Commercial entities do not meet the requirements to be qualified as establishments of a social nature and cannot access the social assistance exemption. However, if the services provided are classified as social assistance, they shall be taxed at the 10% tax rate. Otherwise, the general rate of 21% shall apply.

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