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V2022-17 26 July 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · tipo impositivo reducido

10% VAT rate for home renovation works requires material costs not to exceed 40% of the taxable base

An individual has enquired about the VAT rate applicable to the replacement of PVC windows for energy efficiency purposes. The DGT clarifies that, if the specific requirements for energy rehabilitation are not met, the reduced 10% rate may be applied to renovation works, provided that the cost of materials supplied does not exceed 40% of the taxable base.

The question raised

Tax rate applicable to the aforementioned works.

The DGT's ruling

To apply the 10% rate to renovation and repair works in buildings intended for residential use, the recipient must be a natural person for private use or a community of owners. Construction must have concluded at least two years prior to the commencement of the works. Furthermore, the cost of materials provided by the contractor must not exceed 40% of the taxable base of the transaction; otherwise, the general rate of 21% shall apply.

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