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V0789-22 11 April 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · actividad económica

Deductibility of expenses requires an economic activity and correlation with income

A retired doctor inquired whether they could deduct expenses related to their scientific work (professional fees, conferences, materials) for Personal Income Tax (IRPF) purposes. The Directorate General of Taxes (DGT) ruled that to deduct expenses, an economic activity must first exist and such expenses must be linked to the generation of income.

The question raised

As "the expenses inherent to their non-care professional performance continue to be met, such as, primarily, the fees of the Professional Colleges of Physicians and Odonto-Stomatologists respectively, the expenses derived from the purchase of material necessary for the development, continuity, and maintenance of the aforementioned scientific nature, which is not clinical or care-related, such as websites and scientific galleries, attendance at congresses, and the structural expenses of a consulting room shared with other physicians, in which scientific and research work is progressed, improved, reinforced, promoted, driven, and developed", the question is asked regarding the deductibility of these expenses in the Personal Income Tax (IRPF).

The DGT's ruling

For an expense to be deductible, there must be the exercise of an economic activity, which requires the organization on one's own account of means of production or human resources. If this requirement is met, expenses must be correlated with the generation of income, be justified by an invoice or substitute document, and comply with correct temporal imputation and accounting registration.

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