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V3306-20 6 November 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · tipo reducido

21% standard VAT rate applies to kitchen furniture supply and installation if contracted with the member rather than the developer

A kitchen furniture company requested clarification on the VAT rate applicable to the installation of furniture in housing cooperative units when contracting directly with the member. The Directorate-General for Taxes (DGT) ruled that since the member is not the developer, the reduced VAT rate cannot be applied.

The question raised

Type of Value Added Tax applicable to said installation.

The DGT's ruling

The reduced rate of 10% for the sale with installation of kitchen cabinets requires that the contract be formalized directly with the building developer. In the case of housing cooperatives, the developer is the managing entity thereof. If the contract is entered into directly between the contractor and a member of the cooperative, this requirement is not met and the general rate of 21% must be applied.

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