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V3357-15 2 November 2015 · SG de Impuestos sobre el Consumo Criterion in force
IVA · operaciones de seguro

Vehicle repairs carried out by garages are subject to VAT, even if covered by a warranty service

An entity has enquired whether vehicle repairs covered by its warranty service are exempt from VAT. The DGT has ruled that while the warranty itself is an exempt insurance operation, the repair service provided by the garage is subject to tax.

The question raised

Liability for Tax regarding repairs carried out by workshops.

The DGT's ruling

The provision of services by an entity that undertakes to cover the risk of vehicle repair in exchange for a premium constitutes insurance operations exempt from VAT. However, workshops performing such repairs act as entrepreneurs or professionals, and their services are subject to Value Added Tax.

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