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V0484-17 23 February 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · sujeto pasivo

Cannot deduct VAT on a vehicle if the relationship is labour-dependent

An autonomous professional providing services to a company in which he is a shareholder asks whether he can deduct VAT on a newly purchased private vehicle. The DGT responds that if the relationship is one of labour dependency, he is not a VAT taxpayer and has no right to deduction.

The question raised

Percentage of deductibility of the Value Added Tax amount incurred in the acquisition of the new vehicle.

The DGT's ruling

Liability for VAT requires that the activity be carried out independently, organizing own means and bearing the economic risk. If the partner is subject to the organizational criteria of the company, receives a fixed remuneration not linked to results, and does not have their own means of production, the relationship is employment-based. In this case, the partner is not a taxable person for the tax and cannot deduct the VAT amount of the vehicle. If an independent professional activity were demonstrated, the deduction for passenger vehicles would be presumed at 50%.

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