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V2257-17 8 September 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · régimen especial de bienes usados

VAT deduction for vehicle and premises expenses under the second-hand goods scheme subject to specific requirements

A used vehicle dealership has requested clarification regarding the deductibility of VAT on repairs, fuel, vehicles, mobile phones, and premises expenses. The Directorate-General for Taxes (DGT) clarifies how to calculate the profit margin and the rules for business use required for deduction.

The question raised

Deduction of Value Added Tax amounts incurred for: conditioning, workshops, ITV (technical inspection), and fuel for used vehicles; mobile phone; acquisition of the vehicle for the activity and, where applicable, rental expenses, water, electricity, and landline telephone for the premises that will be used for the activity.

The DGT's ruling

Under the second-hand goods regime, the purchase price for calculating the margin does not include subsequent repairs or spare parts. These expenses, together with those related to the premises, are deductible if they do not form part of the purchase price of the transferred asset. For passenger vehicles, the deduction is presumed to be 50%, unless a different degree of business use is proven. Fuel and related services follow the same logic of business use as the vehicle itself.

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