- Spain’s General Directorate of Taxes issued a ruling on VAT rates for solar panel installations in residential homes.
- Standard VAT rate of 21% generally applies to solar panel installations.
- Reduced VAT rate of 10% applies to newly constructed or comprehensively renovated properties if certain conditions are met.
- Conditions for 10% VAT rate include the transaction being an execution of work, a direct contract between promoter and contractor, and the work involving construction or rehabilitation of primarily residential buildings.
- Rehabilitation must meet qualitative and quantitative requirements.
- If rehabilitation requirements are not met, the 21% VAT rate applies unless the work qualifies as renovation or repair.
- For renovation or repair, the 10% VAT rate applies if the recipient is an individual using the home for private purposes and the contractor’s materials do not exceed 40% of the total invoice.
- The ruling concluded that solar panel installation may qualify for the 10% VAT rate if the contractor’s materials are within the specified limit.
Source: bdo.global
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.
