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V0668-22 28 March 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · deducción

50% IVA deduction possible for motor vehicles if professional use is proven

A lawyer asks whether VAT on a vehicle used for professional activities is deductible. The DGT responds that for motor vehicles, a 50% presumption of professional use applies if such use is proven.

The question raised

Deduction of Value Added Tax incurred in the acquisition and use of the vehicle to be used for the activity.

The DGT's ruling

For passenger vehicles, a degree of business use of 50% is presumed once it is proven that they are, at least, partially used for the activity. This presumption may vary if a different degree of use is proven. Related expenses, such as fuel or repairs, have their own deductibility and depend on their relationship with taxable operations and their use for the activity. Business use must be proven by any means admitted in Law, and mere accounting entries or tax returns shall not be sufficient.

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