VAT on hairdressing services in nursing homes is 21%

The application of the correct tax rate in the provision of services within residential centers has raised doubts regarding the possibility of applying reduced rates. Recently, the Directorate General of Taxes (DGT) has issued a ruling that clarifies the fiscal nature of these provisions.

What the DGT has ruled

The query concerned the VAT rate applicable to hairdressing services provided to residents in elderly care centers. The DGT has determined that these service provisions are subject to VAT at the general tax rate of 21%.

The ruling is based on the fact that Article 91 of Law 37/1992 does not contemplate a reduced rate for this type of activity. The administration maintains that hairdressing cannot be qualified as a social assistance or residential care service, which are necessary requirements to access a relief or a lower tax rate.

What this means for you

This pronouncement has a direct impact on self-employed professionals operating in this sector. If you provide hairdressing services within a nursing home, you must apply 21% VAT on your invoices. The fact that the client is a resident of a care center does not modify the nature of the service provided nor its tax treatment.

The distinction between the environment where the service is provided and the activity itself is key: the residence is the location, but hairdressing is an activity of an aesthetic nature that is not integrated into the social assistance required for the reduced rate.

What you should do

It is necessary to verify that the invoicing of these services complies with the general rate to avoid possible contingencies with the Tax Administration. Since the regulations do not allow the application of reduced rates for these activities, professionals must ensure the correct settlement of the tax in their periodic declarations. It is recommended to assess the particular situation of your activity and the way the service provision is structured to guarantee compliance with Law 37/1992.