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V1797-19 11 July 2019 · SG de Impuestos sobre el Consumo Criterion in force
IVA · tipo impositivo reducido

The 21% rate applies to water supply connections, unless they are carried out within the plot

An individual inquires which VAT rate applies to the contracting of an individual sanitation connection for their home. The DGT responds that the connection of a building to the general networks is taxed at 21%, but the connection works carried out within the plot to bring water and sewerage to the future home may be taxed at 10%.

The question raised

Question posed: Tax rate applicable to said operations for the purposes of Value Added Tax.

The DGT's ruling

The execution of connection works to connect a building to the general water supply networks is not considered building construction, therefore the general rate of 21% applies. However, the connection works carried out within the plot where the home will be located, which aim to bring water and the sewerage connection from said location to the general networks, are considered subject to the reduced rate of 10% if contracted directly between the developer and the company.

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