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V0949-18 11 April 2018 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IRPF · retribución en especie

Cession of rental vehicles for private use by a displaced worker constitutes remuneration in kind

A company asks whether the grant of a rental vehicle for mixed use and a second vehicle for exclusive use by the worker and their spouse constitutes remuneration in kind. The DGT responds that both cases do, and outlines their assessment and deductibility.

The question raised

1) If the first vehicle is being used jointly for the company's activity and for the private purposes of the worker posted to Spanish territory, it is considered remuneration in kind for the latter; could the second vehicle, provided to the same worker and used entirely for their private purposes and those of their spouse, also be considered remuneration in kind?

The DGT's ruling

The use of vehicles for the employee's private purposes constitutes income in kind. If the vehicle is leased via a renting agreement, the valuation of use is applied to the market value of the vehicle as if it were new. In the case of mixed use, a distribution criterion based on availability for private purposes must be applied, rather than mileage or hours. These transfers are services provided for consideration subject to VAT. Renting expenses and repairs are deductible for Corporate Tax purposes if they meet the requirements of registration, accrual, and substantiation.

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