How is the reduced VAT for repairs calculated?

You all know that a reduced VAT of 10% can be applied to your private customers if the amount manual work represent at least 40% of the reform amount.

Where you miss a lot is how to apply that 10% to the invoice (s) you issue to your customers. The usual question is whether You need to issue two invoices,, one with 21% material (since you buy 21% of it) and another with 10% labor?

The answer is no there is no separate invoice for labor and material.

In cases where the workload is 40% or more of the reform material, a reduced value added tax of 10% can be levied, which is offset against the general invoice (surcharge for work and material).

Examples of reduced VAT invoices in the reforms:

  • Bathroom repair:
    Labor: 1800 euros (33% of the total amount)
    Material: 3,500 euros
    Total amount: 5,300 euros → Reduced VAT cannot be applied The invoice looks like this:If it’s a business:
    Assessment base: 5,300 euros
    VAT (21%): 1,113 EUR
    Total bill: € 6,413
  • If you are self-employed:
    Assessment base: 5,300 euros
    VAT (21%): 1,113 EUR
    IRPF (15%): € 795
    Total bill: 5,618 euros

  • Laying floating parquet on the floor:
    Workload: 470 EUR (47% of the total)
    Material: 520 €
    Total amount: 990 € → IF reduced VAT can be applied and the invoice looks like this:If it’s a business:
    Assessment base: 990 euros
    VAT (10%): 99 €
    Total bill: € 1089
  • If you are self-employed:
    Assessment base: 990 euros
    VAT (10%): 99 €
    IPRF (15%): € 148.5
    Total bill: 940.5 euros

  • Complete reform and pricing of two-week certificates:
    Workload: 34,000 EUR (47% of the total)
    Equipment: 26,600 euros
    Total amount: 60,600 euros

    a) The initial certification includes the demolition, which includes all work:
    Workload: 420 euros (100% certification costs)
    Materials: –
    Total amount: 420 € → IF reduced VAT can be applied and the invoice for the initial certification looks like this:If it’s a business:
    Tax base: 420 euros
    VAT (10%): 42 €
    Total bill: € 462If you are self-employed:
    Tax base: 420 euros
    VAT (10%): 42 €
    IPRF (15%): 63 €
    Total bill: € 399b) One of the job references only includes windows. The cost of installing windows is less than 40% of the cost of materials. Although it can be doubtful, the invoice is one of a number of jobs where reduced VAT can be applied.
    Material: € 3,050
    Total amount: € 4,200 → IF reduced VAT can be applied and the invoice looks like this:If it’s a business:
    Assessment base: 4,200 euros
    VAT (10%): 420 €
    Total bill: 4,620 eurosIf you are self-employed:
    Assessment base: 4,200 euros
    VAT (10%): 420 €
    IPRF (15%): 630 €
    Total bill: 3,990 euros

  • Are you losing 10% of the invoice amount?

    If you pay 21% VAT on products but charge 10% for it, are you losing money? The answer is not that simple. We will analyze the most complex case, that of global reform.

    Workforce: 34,000 EUR (47% of the total) There can be 3 cases:

  • You do everything yourself: Hence, this money will be sent straight to your bank account and you will have applied the relevant tax (IRPF). You do NOT have to pay VAT because you don’t create an invoice.
  • They have staff → It is necessary to have a very controlled price / hourly rate. This should include all direct and indirect costs, company social security, etc. We explain it in this article. You do not have to pay VAT because your employees don’t invoice your company.
  • You outsource → VAT is charged on 21% of the installation You pay 7,140 euros including taxes.
  • Materials: You have to buy 26,600 euros from a dealer and he spends 21% of the IV You pay 5,586 euros including taxes.

    Bill your customer: 60,600 EUR + VAT c You enter 6,060 euros VAT.

    Hence in each case:

    • You enter 6,060 EUR VAT, you pay 5,586 EUR, you stay the same, you do not have to pay quarterly VAT
    • You deposit 6060 euros in VAT, pay 5586 euros, stay up and down, you don’t have to pay VAT every quarter
    • You pay 6,060 euros including taxes, you pay 7,140 euros + 5,566 euros = 12,723 euros, you have to pay 6,663 euros including taxes.

    On the other hand, if you don’t have too much spending, know that you won’t get that sales tax until next July. Important: Outsourcing and the application of reduced VAT have their problems.

    When you systematically outsource, you need to have enough mattresses on the bench, which should be larger than if you were doing it alone or with staff, until you enter the next VAT in July next year. Of course, you have to keep in mind that doing the checkout well is more difficult than staying around 0 between deductible sales tax (purchases) and deductible sales tax every quarter. (from your sales to customers).


    If you hire subcontractors in good time, You can use this quarter to buy tools, collect material for future work, rent software that will help you increase your productivity, ie increase your costs. It might seem like a contradiction in terms, but if you still plan to buy it it will help you offset the VAT this quarter rather than waiting 1 year to collect it.


    Another solution is for the customer to pay the subcontractor and you negotiate a percentage with the customer because of that Supervisor, as this fee can be calculated at 10% (if the job meets the requirements). It’s a transparent and easy solution.

    So is it worth charging a reform with 10% reduced VAT?

    Topping up at 10% is always interesting as it cuts your budget by 11%. Or you can earn an 11% margin. If you do the job or you have people on your team, go for it! You will have a great competitive advantage.


    If you outsource very often, you really need to assess your ability to manage your money. When there is no one to control it and you have to do everything yourself (remember that the accountant is not checking your money forecast properly) and these things will cost you or make you lazy, DO NOT apply reduced VAT. You can get into the typical problem of suddenly seeing bills and invoices but seeing that you are out of cash and you don’t understand why, then you are working on paying the bills from previous jobs. how the future advances. Something terribly dangerous.

    Remember that STIMAT, our budget program and sales tool, automatically calculates whether you can apply the reduced VAT and manage subcontractors.