Input on the Spanish VAT on petrol and other deductible costs in Spain by Spanish accountants in Marbella!
Welex: your English-speaking Spanish accountants in Marbella
The tax treatment and regulations related to value added tax (VAT) in Spain are some of the most complex parts of the Spanish legislative system. Therefore, when making your three-monthly tax return, many businesspeople and self-employed professionals may have questions about when certain “special” costs are deductible, and, if they are, if they can be deducted 100%, as for example in the case of the VAT on petrol.
To answer these questions, we need to look at the requirements so we can determine whether or not the VAT of an invoice is deductible. The following conditions must be fulfilled:
- The expenses must be associated with the professional or economic activity of the company or the self-employed businessperson, which are different from private expenses, even though these are paid using the company’s card. For example, we can include travel expenses that are fiscally deductible when these are required within the professional activity.
- The expenses must be duly justified, for example by presenting an original invoice or other types of documents.
- The expenses must be registered in the accountancy books that the taxpayer must obligatory keep in the exercise of his or her economic activity.
In this sense, it is convenient to be careful and to use logic when applying deductible costs, such as the ones associated with the business use of a car.
For example, if a car will be used 100% for business-related activities in Spain, such as the case for distributors, transporters, taxi drivers and driving schools, we can fully deduct the input VAT, as well as other related costs, such as petrol, repairs or replacement parts.
Generally, it is understood that a car will also be used for private use, so the Tax Office admits that use up to 50% of the VAT. However, a taxpayer may attribute a higher percentage of business use, provided they can provide the Tax Office with proof that the car was mainly used for economic activity.
For any questions related to the VAT in Spain, or any other legal issue, do not hesitate to contact our accountants in Marbella. We rely on a multidisciplinary team of tax advisors and accountants that specialise in jurisprudence, taxation and accountancy.
Welex: your lawyers and accountants under one roof.