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V2979-17 16 November 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · ciclo integral del agua

Public Administrations are subject to VAT when providing services for consideration in the course of a business or professional activity

A local neighbourhood board enquired whether its wastewater treatment services were subject to VAT. The DGT ruled that if the service is part of the integrated water cycle, it is subject to the tax; however, if it is an isolated sanitation service charged via a fee, it is not.

The question raised

1.- Tax liability of the aforementioned services provided by the requesting entity.

The DGT's ruling

Public Administrations carry out activities subject to VAT when they perform the distribution of water and other activities of the integrated water cycle. If the sanitation service is provided jointly with the water supply within the framework of the integrated cycle, it is subject to the tax. However, if the sanitation service is carried out separately and is charged via a fee, it shall not be subject to VAT pursuant to Article 7.8 of Law 37/1992.

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