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V4092-16 26 September 2016 · SG de Impuestos sobre el Consumo Criterion in force
IVA · ciclo integral del agua

Water cycle activities are subject to VAT even when consideration is provided via a fee

A public limited company manages the integrated water cycle through agreements with local councils. The DGT has ruled that water distribution services and their related phases are subject to VAT, even if collected through municipal fees.

The question raised

Treatment for Value Added Tax purposes.

The DGT's ruling

The distribution of water and all operations of the integrated cycle (abstraction, supply, purification, sewerage, and treatment) are subject to VAT. This applies even if the consideration is of a tax nature. In the case of hydraulic infrastructures for city councils, the accrual occurs when the city council comes to have full disposal of the assets.

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