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V2675-21 5 November 2021 · SG de Impuestos sobre el Consumo Criterion in force
IVA · entidad de carácter social

Daycare services taxed at 4% if contracted or via administrative contract, or 10% if private

An entity managing daycare centres for people with disabilities has requested a ruling on the VAT rate applicable to its contracted and private services. The DGT has determined that the rate depends on whether the service is provided by a social entity or meets the administrative contracting requirements for the reduced rate.

The question raised

Applicable tax rate for Value Added Tax purposes for said services in the cases presented.

The DGT's ruling

Daycare services provided by social entities are exempt from VAT. If provided by an entrepreneur without such status, they shall be taxed at 10% if they are private services. A 4% rate shall apply to telecare, home help, day and night care centers, and residential care services provided through subsidized places or through prices established in an administrative contract. The 4% rate also applies if there is a linked economic provision covering more than 10% of the price.

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