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V0798-22 11 April 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · gastos de locomoción

Compensation for use of private vehicles may be exempt from Income Tax under certain limits and requirements

An employee has enquired whether monthly subsidies for the use of a private car and diesel allowances are subject to taxation. The DGT has ruled that these amounts may be exempt provided that travel is justified and they do not exceed the limit of €0.19 per kilometre, plus tolls and parking.

The question raised

Whether the criterion followed by the company is correct in applying withholding tax on the total amount received as a "monthly subsidy for the use of a private vehicle".

The DGT's ruling

Allowances for travel expenses are exempt from taxation if the employee travels away from their place of work to perform their duties at a different location. In the event of using a private vehicle, the exemption applies to the amount resulting from calculating 0.19 euros per kilometer traveled, provided that the reality of the travel is justified and justified toll and parking expenses are added. Any excess over these limits shall be subject to taxation as employment income.

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