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V0515-22 14 March 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · estimación directa

Pre-existing costs not deductible in IRPF, but IVA deductions possible under conditions

The tax authority clarifies that expenses before the census registration and start of activity are not deductible in IRPF as they predate the commencement of activity, but may be deducted in IVA if the intention to use them for the activity is proven.

The question raised

Deductibility of expenses incurred prior to the census declaration of registration in the census of entrepreneurs, professionals, and withholders, and prior to the commencement of activity, in the determination of the net income from economic activities for Personal Income Tax purposes. Likewise, the deduction of input tax incurred in Value Added Tax.

The DGT's ruling

In Personal Income Tax (IRPF), expenses accrued prior to the commencement of economic activity are not deductible from the net income. In Value Added Tax (VAT), input tax incurred before the regular commencement of supplies or services may be deducted if the intention to allocate them to the activity is proven. To this end, a provisional deduction percentage may be proposed when filing the census declaration, unless the activity entitles the taxpayer to full deduction.

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