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V0206-20 31 January 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · régimen especial simplificado

Taxi drivers may deduct VAT on vehicle repairs if they are the service recipient and the invoice proves it

A taxi driver under the simplified special regime asks whether they can deduct VAT on a vehicle repair and if the insurer must reimburse this tax. The DGT rules that deductibility depends on whether the driver is the actual recipient of the service and the terms of the insurance contract.

The question raised

Obligation on the part of the insurer to pay the consultant the amount corresponding to the Value Added Tax of the aforementioned invoices. Right of the consultant to deduct the tax paid, as they tax under the simplified special regime.

The DGT's ruling

If the insurance is compensatory, the taxi driver is the recipient of the repair services and may deduct VAT provided that the invoice identifies them as such and complies with legal requirements. The insurer must not receive a VAT pass-through on the indemnity as this does not constitute consideration. The amount of the indemnity that must include VAT will depend on the agreement between the insured party and the company.

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