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V2868-19 17 October 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · renting

Deductibility of rental vehicle fees in IRPF and IVA based on professional use

A technical architect asks about the deductibility of rental vehicle fees for professional use. The DGT responds that under IRPF, deductibility depends on exclusive use or meeting specific investment criteria, while under IVA, a 50% use assumption is made for tourist vehicles.

The question raised

Deductibility of renting installments in both Personal Income Tax and Value Added Tax

The DGT's ruling

In Personal Income Tax (IRPF), renting installments are deductible if the vehicle is exclusively used for the activity, except in cases of accessory and irrelevant use. If the requirements of Article 106 of the Corporate Income Tax Act (LIS) are met, the financial charge and the portion of the installment corresponding to the recovery of the cost shall be deducted within the legal limits. Regarding VAT, passenger cars are subject to a presumption of 50% business use, unless a different degree is proven or they are vehicles from the specified list with 100% business use. Related expenses such as fuel or repairs are also deductible if their consumption is allocated to the development of the activity.

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