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V1798-22 29 July 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · leasing

Vehicle leasing instalments are only deductible if used exclusively for business activities

An architect inquired whether they could deduct passenger car leasing instalments from their Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) ruled that deductibility requires the vehicle to be used exclusively for economic activity, except for very specific exceptions that do not apply to passenger cars.

The question raised

Deductibility in the IRPF of the leasing installments paid for the vehicle.

The DGT's ruling

To deduct acquisition and maintenance expenses for a leased vehicle, it must be used exclusively for the activity. In the case of passenger cars, partial use for private purposes is not permitted. If the contract complies with Article 106 of the LIS, the financial charge and the portion of the installment that recovers the cost of the asset are deductible, subject to the corresponding depreciation limits. Exclusive use and correlation with income must be proven before the Administration.

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