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V3087-16 4 July 2016 · SG de Impuestos sobre el Consumo Criterion in force
IVA · tipo impositivo reducido

Septic tank works may qualify for 10% VAT if they involve renovation or repair and meet specific requirements

A septic tank and sanitation company has requested clarification on the VAT rate applicable to its services in residential properties and communities. The DGT clarifies that renovation or repair works may qualify for the reduced 10% rate under certain conditions, whereas periodic maintenance is subject to the standard 21% rate.

The question raised

Applicable tax rate for the execution of well-digging and sewage works in dwellings and their respective communities of property owners.

The DGT's ruling

Well-digging and sewage works (renewal of collectors, sanitation, and drains) are taxed at 10% if they constitute renewal or repair, the recipient is an individual or a community of property owners, the building is more than two years old, and the cost of materials supplied does not exceed 40% of the taxable base. If the materials exceed this limit, the operation is considered a supply of goods and is taxed at 21%. Periodic maintenance services for pipes and drains do not constitute repair works and are taxed at the general rate of 21%.

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