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Practical Handbook VAT 2022

Reduced tax rate of 10 percent

The rate of 10 per cent applies to the following transactions:

  1. The supplies, intra-Community acquisitions and imports of the following goods, as well as the execution of works that are considered to be the provision of services and as an immediate result of obtaining these goods:

    • Substances or products which are normally and suitably suitable for use in human or animal nutrition, as well as animals, plants and other products which are normally and suitably suitable for use in the production of such products.

      From 1 January 2021, beverages containing added sweeteners, both natural sweeteners and sweetening additives, are excluded from this concept and taxed at the general rate of 21 percent.

    • Certain assets likely to be used for agricultural, forestry or livestock activities.

    • Waters fit for human or animal consumption or for irrigation.

    • Medicinal products for veterinary use.

    • Pharmaceutical products covered by Chapter 30 "Pharmaceutical products" of the Combined Nomenclature, for direct use by the final consumer, other than veterinary medicinal products and those to which the 4 per cent rate applies.

      Pads, tampons, panty liners, condoms and other non-medicated contraceptives, as well as medical equipment, devices and other instruments, listed in section eight of the Annex to the Tax Act, which by their objective characteristics are designed to alleviate or treat impairments, for the exclusive personal use of persons with physical, mental, intellectual or sensory impairments, without prejudice to goods for which the rate of 4 per cent is specifically provided for.

      This category of goods does not include other accessories, spare and replacement parts for such goods.

    • Buildings or parts thereof suitable for use as dwellings, including garages, with a maximum of two, and annexes that are transferred together.

    • Flowers, live ornamental plants, as well as seeds, bulbs, cuttings and other products of exclusively vegetable origin suitable for use in the production of flowers and live plants.

  2. The following services:

    • Carriage of passengers and their luggage.

    • Hotel, camping and spa services, restaurant services and, in general, the supply of food and drink for consumption on the spot, even if they are made to order.

    • Mixed services of catering, entertainment, discotheques, nightclubs, nightclubs, barbecues and similar services are not expressly exempted from the reduced rate.

    • Certain services performed for the benefit of holders of agricultural, forestry or livestock holdings.

    • Cleaning services for public roads, parks and public gardens.

    • Services for the collection, storage, transport, recovery or disposal of waste, cleaning and rat extermination of public sewers and the collection or treatment of waste water.

    • Admission to libraries, archives and documentation centres, museums, art galleries, art galleries, art galleries, theatres, circuses, bullfights, concerts and other live cultural events.This reduced rate also applies to admission to cinemas.

    • The provision of social welfare services that are not exempt and are not subject to the 4 per cent rate.

    • Amateur sporting events.

    • Trade exhibitions and fairs.

    • Renovation and repair work carried out on residential buildings that meet certain requirements.

    • Leases with an option to purchase of buildings or parts thereof intended exclusively for dwellings, including parking spaces, with a maximum of two units, and annexes located therein that are leased jointly.

    • The transfer of the rights to use buildings, groups of buildings or architecturally differentiated sectors of buildings when the property has at least ten lodgings, in accordance with the provisions of the regulations governing these services.

    • Those provided by performers, artists, directors and technicians, who are natural persons, to producers of cinematographic films to be shown in theatres and to organisers of theatrical and musical works.

  3. The execution of works, with or without the provision of materials, which meet the following requirements:

    • They are the result of contracts directly concluded between the promoter and the contractor.

    • The purpose of which is the construction or renovation of buildings or parts thereof intended primarily for residential use.

  4. Sales with installation of kitchen, bathroom and built-in wardrobes, when certain requirements are met.

  5. The execution of works, with or without the provision of materials, resulting from contracts directly concluded between the communities of owners of the buildings referred to in point 3 and the contractor whose purpose is the construction of additional garages, provided that the number of spaces to be allocated to each of the owners does not exceed two.

  6. Imports of works of art, antiques and collectors' items, as well as intra-Community supplies and acquisitions of works of art when the supply is made by their authors or successors in title and entrepreneurs who are not resellers and who are entitled to a full deduction of input tax.

  7. From 26 June 2021 to 30 June 2022, for electricity contracts whose fixed power term does not exceed 10 kW, a reduction from 21 to 10 per cent in the tax rate of VAT applicable to all components of the electricity bill is established, when the average monthly wholesale market price in the month prior to the billing month has exceeded 45 €/MWh.

    The VAT rate applicable to the electricity bill of electricity supply contract holders who are recipients of the social voucher and are also recognised as severely vulnerable or severely vulnerable at risk of social exclusion, during the period referred to in the previous paragraph, regardless of the wholesale market price of electricity, is also reduced to 10 per cent.