Psychology services are only exempt from VAT if they are for diagnostic or treatment purposes

The application of the Value Added Tax (IVA) exemption in the field of mental health frequently raises doubts regarding the scope of psychology services. The Dirección General de Tributos (DGT) has specified the limits of this exemption to avoid erroneous interpretations of which professional services fall outside the tax.

What the DGT has ruled

According to the interpretation of Law 37/1992, for healthcare services to enjoy the exemption provided in Article 20.One.3º, two conditions must be strictly met:

• Objective requirement: The services must have as their direct purpose the diagnosis, prevention, or treatment of diseases.
• Subjective requirement: The provision must be carried out by medical or healthcare professionals in accordance with the current legal framework.

The tax authority clarifies that if the psychological activity has a purpose other than the diagnosis, prevention, or treatment of diseases, the service cannot benefit from the exemption and must be taxed at the general VAT rate.

What this means for you

If you are a psychology professional or a client receiving these services, it is fundamental to understand that the exemption is not automatic simply because it is a mental health service. The nature of the intervention determines the tax burden. If the activity is oriented toward personal well-being, counseling, or coaching without a clinical purpose of diagnosing or treating pathologies, the service will be subject to VAT.

What should be done

It is necessary to analyze the technical nature of each intervention provided. To ensure regulatory compliance, it must be verified that the activity fits within the assumptions of Law 44/2003 and that the professional holds the enabling qualification that allows them to act under the criteria of healthcare assistance. Each case requires a technical assessment of the purpose of the service to determine its correct tax treatment.