Garden maintenance services will be taxed at 21% VAT

The correct classification of gardening work is decisive for the application of the Value Added Tax (IVA) rate. The Directorate General of Taxes (DGT) has delimited the boundary between maintenance service provisions and actions that can be considered renovation or repair works.

What the DGT has resolved

The administration has established that periodic garden maintenance does not constitute the execution of a work. Therefore, this type of service must be taxed at the general rate of 21%.

However, actions that are not periodic in nature and consist of the renovation or repair of gardens may benefit from the reduced rate of 10%, provided that the following requirements are simultaneously met:

• The recipient of the operation is an individual or a community of owners.
• The property subject to the action is more than two years old.
• The cost of materials does not exceed 40% of the taxable base of the operation.

It is important to note that if the cost of materials exceeds the 40% limit, the general rate of 21% must be applied to the entire operation.

What this means for you

For companies in the sector, this resolution requires a precise technical distinction in invoicing. The nature of the work is not enough; it is necessary to document whether the action is recurring maintenance or a specific renovation work to avoid errors in the tax settlement.

For individuals and communities of owners, compliance with the requirements regarding the age of the property and the materials limit is fundamental to accessing the savings provided by the 10% rate on renovation works for their green spaces.

What should be done

It is necessary to analyze the nature of each contract and the composition of material costs before issuing the invoice. In the case of renovation works, the age of the property must be verified and it must be ensured that the proportion of materials remains within legal margins to prevent the entire invoice from being taxed at 21%.