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V1707-22 15 July 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · tipo reducido

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

A taxpayer inquired whether gardening works (drainage, levelling, planting, and irrigation) qualify for the reduced VAT rate. The DGT ruled that while periodic maintenance is subject to the 21% rate, renovation or repair works may qualify for the 10% rate provided certain requirements are met.

The question raised

Applicability of the reduced Value Added Tax rate to the described works.

The DGT's ruling

Gardening works that involve a substantial modification or improvement (renovation or repair) may apply the 10% rate if the recipient is an individual and the dwelling was constructed more than two years ago. To this end, the cost of the incorporated materials (soil, plants, irrigation systems, etc.) must not exceed 40% of the taxable base. If this limit is exceeded, the entire operation shall be taxed at the general rate of 21%.

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