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V2972-14 3 November 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · ejecución de obra

Periodic garden maintenance subject to 21% VAT rather than 10% reduced rate

A community manager enquired whether gardening services for homeowners' associations could qualify for the 10% reduced VAT rate. The Directorate-General for Taxes (DGT) ruled that periodic maintenance constitutes a provision of services rather than the execution of a work project, and must therefore be taxed at the standard 21% rate.

The question raised

Applicable tax rate for gardening services carried out for a community of property owners and, in particular, whether the reduced rate of article 91.Uno.2.10 of Law 37/1992 is applicable to them.

The DGT's ruling

Garden maintenance services, being periodic and continuous provisions, constitute leases of services and are taxed at 21%. Only garden renovation or repair works may apply the reduced rate of 10% if they meet the requirements of the Law. To this end, the work must aim for a future result and the cost of incorporated materials must not exceed 40% of the taxable base.

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