NEWSLETTER - REDUCED VAT RATE (6%) TO URBAN REHABILITATION WORKS

On March 26, 2025, the Supreme Administrative Court issued a Judgment for the harmonization of case law, which confirmed the requirements for the application of the reduced VAT rate (6%) to urban rehabilitation works contracts, pursuant to the previous wording of item 2.23 of List I annexed to the VAT Code. The Court concluded that the reduced rate is only applicable to rehabilitation works contracts relating to properties located “within an Urban Rehabilitation Area for which an Urban Rehabilitation Operation has been previously approved.”