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V0304-24 5 March 2024 · SG de Impuestos sobre el Consumo Criterion in force
IVA · derecho a la deducción

VAT deduction for travel and vehicle expenses depends on the nature of the relationship between partner and company

A commercial agent asks whether his future company can deduct VAT on travel and vehicle expenses incurred by him as a partner. The DGT states that VAT liability for the partner's services depends on whether the partner acts independently or under a dependent employment relationship.

The question raised

Whether the company could deduct the Value Added Tax installments incurred for travel expenses and the vehicle used by the partner.

The DGT's ruling

The company may deduct VAT on travel and displacement services if the amount is considered a deductible expense for Corporate Income Tax purposes. Regarding the vehicle, the deduction will depend on its use for business activities, with a presumption of business use of 50% for passenger cars, unless it is a vehicle from the specified list (such as commercial agents) with 100% business use. Fuel and maintenance expenses must be decoupled from the vehicle acquisition and their use for business activities must be proven.

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