Supreme Court Ruling: Reduced VAT Rate for Desalinated Water Supply in Mixed Contracts

• The Supreme Court confirms that desalinated water supply is subject to a reduced 10% VAT rate in mixed contracts
• The case involves a concession contract for a desalination plant executed by Acciona and Cadagua
• Previous rulings by the Tax Office imposed a 21% VAT rate, which was contested by the UTE and ultimately appealed to the Supreme Court
• The Supreme Court ruled that the operations under the contract constitute a delivery of goods and are subject to a 10% VAT rate
• The ruling is based on EU directives and previous court cases, which define the delivery of goods and the importance of the main operation in mixed contracts
• The contract focuses on delivering desalinated water, with the other services being considered necessary but accessory

Source: audiconsultores-etlglobal.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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