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V0528-20 4 March 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · gastos de locomoción

Mileage payments using own vehicles may be exempt from Income Tax if travel is justified

A company has enquired whether paying 0.19 euros per kilometre to its employees, alongside providing fuel vouchers, is exempt from Income Tax. The Directorate-General for Taxes (DGT) has ruled that these amounts may be exempt provided they comply with the limits and justification requirements set out in the Regulations.

The question raised

The tax treatment that, for the purposes of Personal Income Tax, must be applied to the amounts received by workers for this concept (mileage), and the means of justification for the purposes of applying Article 9.A.2 of the Tax Regulations.

The DGT's ruling

Amounts intended to offset travel expenses for commutes outside the workplace are exempt from taxation pursuant to Article 9.A.2 of the Personal Income Tax (IRPF) Regulations. In the event of the use of a private vehicle, the exemption is limited to a calculation of 0.19 euros per kilometer traveled, plus toll and parking expenses, provided that the reality of the travel is justified. The reality of the journey may be proven by any means admitted in Law, although its assessment is the responsibility of the Administration. Any excess over these limits shall be taxed as employment income.

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