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V2913-18 14 November 2018 · SG de Impuestos sobre el Consumo Criterion in force
IVA · ejecución de obra

Repair works in homes for disadvantaged persons funded by a local council are subject to 21% VAT

A local council has requested clarification on whether repair works in homes for people without resources are VAT exempt or which rate applies. The DGT has determined that there is no exemption based on social assistance and that the general rate of 21% applies, as the council is the recipient of the operation.

The question raised

Exemption of works undertaken by the city council in the dwellings of disadvantaged persons, and the applicable tax rate, where appropriate.

The DGT's ruling

Repair works are not exempt from VAT as they constitute the execution of works rather than social assistance services. The reduced rates of 8% or 10% do not apply because the city council is the recipient of the transaction and not a natural person or a community of property owners. Therefore, the transaction is taxed at the general rate of 21%.

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