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V5077-16 23 November 2016 · SG de Impuestos sobre el Consumo Criterion in force
IVA · refacturación

Re-invoicing of electricity by a local authority to a contractor is subject to 21% VAT

A local authority re-invoices a contractor for a swimming pool service the proportional share of its electricity consumption. The DGT has determined that this operation constitutes a supply of services subject to VAT.

The question raised

Liability for Value Added Tax on the amount of electricity consumption rebilled by the City Council to the successful bidder.

The DGT's ruling

The rebilling of electricity expenses by the City Council is a provision of services subject to and not exempt from VAT. The general rate of 21 percent must be applied. The taxable base shall be the total amount of the consideration agreed upon in the contract or freely between the parties, which may include the VAT of the original invoice itself.

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