VAT application. 10 or 21%?

Is it possible that different companies offer budgets with different VAT? 10%? 20%? Are they applying the correct VAT to your budget or income? 

Here we explain it in detail!

 

It should be borne in mind that photovoltaic panel installations are subject to different VAT rates depending on the type of installation and the type of customer. First of all, it is complicated to apply a reduced VAT in an existing photovoltaic installation. 

However, it should be remembered that in fraudulent cases of inspection, the Agencia Estatal de la Administración Tributaria will oblige both the end customer and the contractor to contribute the VAT avoided and to pay a significant financial penalty. 

 

Discover the different VAT rates that can be applied:

0% VAT:

Business (professional activity):

  • NEW WORKS or REHABILITATION WORKS installation. In this case, it can go for Inversión del Sujeto Pasivo (ISP) and then, 0% VAT. 

 

10% VAT:

It can be applied a 10% VAT in works done in a dwelling of an individual (particular activity):

  • NEW WORKS installation
  • REHABILITATION WORKS
    • Contracts formalized directly between the promoter and the contractor.
    • It must be a rehabilitation project drafted and validated by an architect, technical architect or engineer, and stamped by the official College, which accredits:
      1. That the 50% of the total cost of the project be structual, facade, etc.
      2. The total cost of the project works exceeds 25% of the purchase price of the property if it was purchased during the 2 years prior to the start of the work, or the market value of the property at the beginning of the work.   
  • RENOVATION AND REPAIR WORKS of installations already done:
    • When the total money amount does not exceed the 40% of the invoice.
    • When the recipient is an individual (without business or professional activity) or a community of owners.
    • When the dwelling be used for personal use.
    • When it is more than 2 years since the construction or the last rehabilitation.

 

21% VAT:

Dwelling of an individual (individual activity):

  • 21% VAT is applied if the past requirements from 10% VAT are not met. 

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