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V1013-22 5 May 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimiento neto

Deductibility of interest and vehicles depends on exclusive use for economic activity

The applicant asks whether they can deduct loan interest and electric vehicle expenses within their economic activity. The DGT rules that deductibility is conditional upon proving a link to income and the exclusive use of the vehicle for the business.

The question raised

Whether the interest on the aforementioned loan and the acquired vehicle are deductible for Personal Income Tax purposes.

The DGT's ruling

Loan interest is deductible if it is proven that the debt is necessary to obtain income and is linked to the activity. To deduct expenses for a passenger car (including depreciation), it must be an asset assigned to the activity, which requires its exclusive use in the economic activity, as the exception for incidental personal use does not apply to this type of vehicle. If the loan finances the vehicle, the interest will only be deductible if the vehicle meets the requirement of exclusive assignment.

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