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V0916-14 1 April 2014 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · elementos patrimoniales afectos

Expenses and depreciation cannot be deducted for passenger cars used for private purposes

A lawyer inquired about which vehicle expenses are deductible when using a car for both professional activities and personal use. The Directorate General for Taxes (DGT) ruled that, as private use is not merely incidental, the vehicle is not considered dedicated to the business activity and therefore does not allow for tax deductions.

The question raised

For the purposes of Personal Income Tax, it is requested to determine which expenses related to the referred vehicle are deductible in the determination of the net income from the taxpayer's economic activity.

The DGT's ruling

Passenger cars are not considered to be used for private needs in an accessory and irrelevant manner. If the vehicle is used simultaneously for economic activity and for private purposes, it is not considered to be used for the activity. In this case, neither depreciation nor expenses derived from its use are deductible.

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