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V2266-17 8 September 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · derecho a la deducción

VAT on household utilities (electricity, water, internet) is not deductible if used for both private and professional purposes

A self-employed professional enquired whether they could deduct VAT on household utilities (electricity, water, telephone, or internet) in proportion to their professional office use. The Directorate-General for Taxes (DGT) ruled that deduction is not possible because these services are not directly and exclusively dedicated to the business activity.

The question raised

Question raised: Possibility of deducting tax amounts incurred for electricity, telephone, water, or Internet consumption in proportion to the part of the dwelling used for professional activity.

The DGT's ruling

Entrepreneurs or professionals may not deduct tax amounts for goods or services that are not directly and exclusively used for their activity. Services used simultaneously for professional activity and for private needs are not considered to be directly and exclusively used. As these are not investment goods, partial deduction of household utilities is not applicable.

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