Alopecia treatments will be taxed at 21% VAT if for aesthetic purposes

The nature of the services provided to combat alopecia determines their tax treatment under Value Added Tax (IVA). Not all procedures related to hair health enjoy the same tax benefit, which necessitates a clear distinction between healthcare and aesthetic care.

What the DGT has ruled

The Dirección General de Tributos (DGT) has analyzed the application of the exemption provided for in article 20.one.3º of Law 37/1992. The criteria establish that medical assistance services for alopecia are exempt from VAT only if they meet two concurrent requirements:

• They must be provided by medical or healthcare professionals.
• They must aim at the diagnosis, prevention, or treatment of a disease.

Conversely, those services that have a purely aesthetic or cosmetic purpose, such as hair implants or appearance enhancement treatments, cannot benefit from the exemption and must be taxed at the general rate of 21%.

What it means for you

For specialized clinics, this ruling implies the need to correctly segment their service offerings. Invoicing must precisely differentiate which interventions fall into the category of healthcare and which into aesthetics to avoid errors in the tax settlement.

For users, the final cost of a treatment will depend on the technical classification of the intervention. A procedure considered medical will not include VAT in the invoice, whereas a treatment of a cosmetic nature will increase the total cost by 21%.

What should be done

Determining whether an intervention has a medical or aesthetic purpose is a matter of fact. This means that the burden of proof lies with the interested party. In the event of an inspection, it will be necessary to have the clinical documentation that justifies that the treatment responds to a health need and not to a desire for aesthetic improvement, thereby ensuring the application of the corresponding exemption.