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V2819-20 17 September 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · rehabilitación energética

10% reduced VAT rate applicable to energy renovation works subject to qualitative and quantitative requirements

The taxpayer asks whether the installation of photovoltaic panels for self-consumption can be taxed at the 10% reduced rate as energy renovation work. The DGT explains that to apply this rate, the works must meet qualitative requirements (the main purpose must be reconstruction) and quantitative requirements (the cost must exceed 25% of the property's value).

The question raised

Applicability of the reduced rate of 10 percent in Value Added Tax, in respect of energy rehabilitation works intended for the incorporation of equipment using renewable energy sources.

The DGT's ruling

To apply the 10% rate for rehabilitation, the works must result from a direct contract between the developer and the contractor in buildings primarily intended for residential use. Qualitatively, more than 50% of the cost must be for consolidation, structural, facade, roofing, or analogous/related works, including energy rehabilitation. Quantitatively, the total cost must exceed 25% of the acquisition price or market value of the building (excluding the land).

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