Frequently asked questions on building works and repairs
No, given that the cost of materials provided by the business or professional carrying out the work will naturally exceed 40% of the total cost. When this limit is surpassed, the renovation or repair work is considered the supply of goods and, therefore, is taxed at the general VAT rate of 21%.
Nevertheless, the 10% rate is applicable if the replacement of boilers forms part of the overall restoration work in the building, and when the cost exceeds 25% of the acquisition price or market value of the building prior to restoration, excluding the land value.
The 21% VAT rate is applied, given that the owner, who is the recipient of the repair services, is renting out the residence, as opposed to using it for private use.
It applies to renovation and repair work on buildings or parts thereof intended for housing. This concept can include masonry, plumbing, electrics, painting, carpentry, etc.
No. The reduced rate is applicable for renovation and repair works. Maintaining the installation sis not considered to be the execution of works, therefore the tax rate applicable for these operations is 21%.
Yes, the 10% VAT rate will be applied, provided they form part of an overall renovation project whose cost exceeds 25% of the acquisition price, or the market price of the building prior to restoration, excluding the land value.
Works to install control systems or equipment or telecommunications devices can be included under reparation or renovation of buildings.
However, to apply the reduced rate, the cost of 'materials provided' by the business or professional executing these works, which must be physically incorporated in to the building, directly or before transformation, cannot exceed 40% of the total cost of works.
In this case, whereby telecommunications devices are installed, it is logical to presume that the cost will be much higher than the limit above, therefore the applicable tax rate is 21%.
They will be taxed at 10% when the insured person using the residence for his/her own private use, or the homeowner association, contract with the repair company directly, and are therefore obliged to make the payment themselves.
Otherwise, they will be taxed at 21% if the insurance company is the legal recipient of the repairs, and therefore appears as such on the corresponding invoices.
The total cost of restoration works or the total cost of the restoration project is considered to be the total amount, excluding VAT, that the developer pays as a result of deliveries of goods and service provisions derived from the restoration, including services provided by technical staff managing the works. The concept of the total cost of the restoration project includes any licences needed for this purpose.
No, given that in these cases the provision of materials normally exceeds the 40% limit of the total cost of works, and therefore it is taxed at the general rate of 21%.
No. Swimming pools are not considered to be buildings or parts thereof used for residence. The applicable tax rate is 21%.
The person carrying out the works cannot provide materials that cost above 40% of the gross tax base of the transaction. For example:
Installing the flooring of a residence for €10,000, whereby €3,000 corresponds with materials provided by the person carrying out the works, is all taxed at a VAT rate of 10%.
However, works for a total amount of €10,000, if the materials provided amount to €5,000, are taxed at the VAT rate of 21%.
The invoice must include the cost of the materials provided, or that the requirement to not exceed 40% of the gross tax base has been met.
Within the same execution of works, qualified overall as a supply of goods, the part corresponding to the service cannot be differentiated with a view to only tax this portion at 10%. In the second example, the invoice cannot separately indicate a supply of materials for €5,000 applying the 21% rate, and a service provision for €5,000 applying the 10% rate.
Yes, if the restoration project for the existing building, partly used as a residence for the religious congregation and partly as a residence for the elderly, can be qualified as a restoration.
All tangible property that is incorporated in to the building as part of these works, directly or before being processed, such as bricks, stones, lime, sand, plaster and other materials needed to carry out the works, including works subcontracted to third parties.
'Materials provided' do not include goods used as production means by the company that carries out the renovation or repair operations, which are not materially incorporated into the building in question, such as machinery, tools, etc.