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V1206-20 4 May 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · elemento patrimonial afecto

Vehicle expenses are only deductible if used exclusively for economic activity

A lawyer inquired whether she could deduct car expenses (loan, leasing, fuel, etc.) from her Personal Income Tax (IRPF). The Directorate General of Taxes (DGT) ruled that to deduct these expenses, the vehicle must be an asset used exclusively for professional activity.

The question raised

Whether the expenses generated by the car can be deducted in the Personal Income Tax: loan or renting installments, fuel, insurance, repairs, etc.

The DGT's ruling

For the expenses of a passenger vehicle to be deductible, it must be an asset exclusively assigned to the economic activity. Partial assignment is not permitted if the vehicle is also used for private purposes, except in specific activities not contemplated in this case. Exclusive assignment must be proven through means of evidence admitted in law. In the case of renting, the deductibility of the installments will depend on whether they meet the requirements of Articles 28 of the LIRPF and 106 of the LIS.

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