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V2462-20 20 July 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · ejecución de obra

Periodic maintenance taxed at 21% VAT, while repairs may qualify for 10%

A homeowners' association has requested clarification on the VAT rates applicable to maintenance, repair, and replacement services for facilities. The Directorate General for Taxes (DGT) has ruled that periodic maintenance constitutes a service subject to 21% VAT, whereas repairs or renovations may qualify for the reduced 10% rate, provided specific requirements are met.

The question raised

Applicable tax rate for the indicated maintenance services and, in particular, whether the reduced rate of Article 91.One.2.10º of the Value Added Tax Law is applicable to them. Applicable rate for the repair and replacement services of the installations.

The DGT's ruling

Periodic maintenance services, being of continuous supply and consisting of inspections or conservation tasks, are service provisions subject to the 21% rate. Non-periodic repairs or renovations may apply the reduced rate of 10% if they constitute works, are carried out in buildings intended for residential use, and the cost of materials provided does not exceed 40% of the taxable base. If the cost of materials exceeds this limit, the entire operation shall be taxed at 21%.

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