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V1270-22 6 June 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · actividades económicas

Social Security contributions cannot be deducted without a real economic activity

The inquirer asks whether they can deduct their self-employed social security contributions as a business expense despite having no income. The DGT rules that without the organisation of resources to produce or distribute goods or services, no economic activity exists and, therefore, no expenses are deductible.

The question raised

Whether Social Security contributions may be deducted in Personal Income Tax (IRPF) as expenses of one's economic activity.

The DGT's ruling

For income from economic activities to exist, there must be an organization on one's own account of means of production and/or human resources to intervene in the production or distribution of goods or services. If this condition is not met, no economic activity is carried out and expenses related thereto may not be deducted. The existence of such organization is a matter of fact that must be substantiated by means of evidence.

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