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V3181-23 11 December 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · tipo impositivo reducido

Requirements for applying 10% VAT and the 60% tax deduction when replacing thermal panels

An individual has enquired whether replacing thermal panels due to damage allows for the application of the reduced 10% VAT rate and the energy efficiency tax deduction for Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) has ruled that this is possible, provided that the requirements for renewal and repair are met for VAT purposes, and the energy efficiency improvement criteria are satisfied for IRPF purposes.

The question raised

Requirements for applying the reduced VAT rate of 10 percent.

The DGT's ruling

For VAT, the 10% rate shall apply if the work consists of renovation and repair, the recipient is a natural person for private use, the dwelling is at least two years old, and the cost of materials does not exceed 40% of the taxable base. For Personal Income Tax (IRPF), the 60% deduction provided in the 50th Additional Provision may be applied if, by means of an energy efficiency certificate, a reduction in non-renewable primary energy consumption of at least 30% or an improvement in the rating to class 'A' or 'B' is proven.

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