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V1116-16 21 March 2016 · SG de Impuestos sobre el Consumo Criterion in force
IVA · deducción de cuotas

VAT on telephone services with mixed business and private use cannot be deducted

A taxi driver inquired whether he could deduct VAT on a data plan contracted as part of a single package with his home internet service. The DGT ruled that, as it is impossible to distinguish which portion relates to the business activity and which to private use, the requirement of direct and exclusive use is not met.

The question raised

Possibility of deducting tax amounts incurred by the cost of a data tariff partially dedicated to the economic activity.

The DGT's ruling

Entrepreneurs or professionals may not deduct tax amounts incurred for goods or services that are not directly and exclusively used for their activity. Services used simultaneously for professional activity and for private needs are not considered directly and exclusively used for the activity. As there is no breakdown in the telephone bill that allows for the separation of professional use from private use, it is not possible to deduct the tax amounts in any amount or measure.

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