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V2636-20 12 August 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · tipo impositivo reducido

10% VAT rate applies to renewable energy installations subject to renovation or repair requirements

A company has requested clarification on the VAT rate applicable to the installation of photovoltaic systems in residential or single-family buildings. The DGT has ruled that these works are subject to the 10% reduced rate only if they qualify as renovation and repair works under specific requirements, or if they are part of a comprehensive rehabilitation project.

The question raised

Applicable tax rate for the operations subject to consultation.

The DGT's ruling

The installation of renewable energy systems by itself does not constitute a rehabilitation work, and therefore is taxed at 21%. However, it may be taxed at 10% if it is classified as a renovation and repair work intended for private use or homeowners' associations, provided that the dwelling was completed at least two years ago and the cost of the materials supplied does not exceed 40% of the taxable base. If this material limit is exceeded, the general rate of 21% shall apply to the entire operation.

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