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V2061-18 12 July 2018 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · estimación directa

Interest on loans for premises is only deductible if used for economic activity

A self-employed individual inquired whether they could deduct expenses arising from loan instalments used to purchase a commercial premises. The Directorate General for Taxes (DGT) ruled that interest is only deductible if the premises are directly used for the business activity.

The question raised

Whether any expense derived from the installments of the requested loan may be deducted.

The DGT's ruling

For loan expenses to be deductible, they must be correlated with the income of the activity. In the case of a loan to finance a premises, only the interest paid shall be deductible, provided that the property is used for the economic activity. The acquisition value of the premises shall be deducted through depreciation.

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