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V0593-23 13 March 2023 · SG de Impuestos sobre el Consumo Criterion in force
IVA · prestación de servicios

The transfer of vehicles to employees without salary reduction is considered an operation not subject to VAT

A company inquires whether making renting vehicles available to executives and sales staff without affecting their salary constitutes a consideration-based supply. The DGT responds that, as there is no direct consideration or waiver of remuneration, the operation is free of charge and not subject to VAT.

The question raised

Question posed: Whether the making available of vehicles to certain employees by the inquiring entities, without effect on their salary, can be considered a supply of services for consideration for the purposes of Value Added Tax.

The DGT's ruling

The transfer of vehicles to executives is an operation not subject to VAT, as it is assimilated to a benefit provided to employees without a right to deduction. For sales staff, the transfer is a self-consumption of services for company purposes, which is also not subject to VAT. In the latter case, the deduction of VAT incurred on the acquisition of the vehicles shall be carried out according to their degree of use in the activity.

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