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V3158-20 22 October 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · renting

Renting services with included insurance may constitute a single supply subject to VAT if the client cannot choose the insurer

A renting company has requested a ruling on whether its service models (with and without insurance) are single or independent supplies for VAT purposes. The DGT is analysing whether the insurance constitutes a separate service or is part of the consideration for the renting service.

The question raised

Whether the provision of the renting service by the applicant in the two modalities offered is considered a single supply of services for Value Added Tax purposes.

The DGT's ruling

If the client does not have the power to freely choose the insurance company nor can they negotiate the conditions, the insurance and the renting constitute a single supply of services subject to VAT. In the modality where insurance is mandatory and the conditions are imposed, it is not considered an independent service. Conversely, if the lessee were able to choose their own insurer, it would be considered an independent supply.

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