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V2146-20 25 June 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · base imponible

Development premiums for day care services are subject to VAT depending on their nature and the entity involved

The applicant inquired whether the monthly development premiums received for 'casa do maior' (day care) services are subject to VAT. The DGT ruled that these premiums constitute consideration for the services provided and are therefore subject to VAT, although their exemption or tax rate will depend on the status of the entity and the specific type of service.

The question raised

Whether the income received monthly is subject to Value Added Tax.

The DGT's ruling

Development premiums constitute consideration for services and are subject to VAT. If the entity is a public law entity or a private establishment of a social nature, elderly care services are exempt. If it is not a social entity, they shall be taxed at 10% or at 4% if they are telecare services, home help, day/night centers, or residential care under agreed places or prices fixed by administrative contract, or if there is a linked economic benefit covering more than 10% of the price.

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