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V5181-16 30 November 2016 · SG de Impuestos sobre el Consumo Criterion in force
IVA · asistencia social

4% VAT rate applies to social assistance services if Law 39/2006 requirements are met

A commercial company enquired whether the management of assisted living and day centre services was VAT-exempt or subject to a specific tax rate. The DGT has determined that, as it is not a social entity, it does not qualify for exemption, but may apply the reduced rate of 4% under certain conditions.

The question raised

Taxability of the services provided by the applicant to the municipal company. Tax rate.

The DGT's ruling

Telecare, home help, day/night center, and residential care services are taxed at 4% if they correspond to those defined in Law 39/2006. This application is independent of the existence of an Individual Care Plan or the source of public funding. To apply the 4% rate, services must be provided in contracted places, through administrative tender prices, or when an economic benefit covers more than 75% of the price. Dependency prevention and personal autonomy promotion services are excluded.

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