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V2414-22 22 November 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · prestación patrimonial de carácter público no tributario

Considerations for water, sewerage, and waste services are non-tax patrimonial benefits and are subject to VAT if provided through differentiated personification or indirect management

A City Council inquires about the legal nature of charges for water supply, sewerage, and waste collection when managed through commercial companies or private entities. The DGT determines that, due to differentiated personification, these charges are non-tax patrimonial benefits of a public nature and are subject to VAT.

The question raised

Classification of the considerations to be received by the inquirer from users of the indicated services and the liability for Value Added Tax on said services.

The DGT's ruling

If the public service is provided through direct management with differentiated personification (commercial company or public business entity) or indirect management (concession), the consideration is a non-tax patrimonial benefit of a public nature. In these cases, as they are provided directly by commercial, mixed, or private companies to users, the operations are subject to VAT. This differs from when the City Council provides the service directly through its own means, which would constitute a fee not subject to the tax (except in water distribution).

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