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V3299-17 27 December 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · ciclo integral del agua

Wastewater sanitation services are not subject to VAT if provided independently of water supply

A City Council has enquired whether the sewerage and wastewater treatment rate is subject to VAT. The DGT has ruled that if the service is provided separately from water distribution, it is not subject to the tax; however, if it forms part of the integrated water cycle alongside the supply, it is subject to VAT.

The question raised

Taxation in Value Added Tax of the services provided by the City Council.

The DGT's ruling

Sanitation services performed by a Public Administration through a consideration of a tax nature are not subject to VAT if they are not included in the list of excluded activities under Article 7.8 of Law 37/1992. However, if the sanitation is provided within the framework of the integrated water cycle, together with supply and distribution, the operation is subject to the tax. In the latter case, the sanitation fee must form part of the taxable base of the water supply.

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