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V3064-14 7 November 2014 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · gastos de locomoción

Geographical dispersion allowance may be exempt from Income Tax if it compensates for travel expenses

A healthcare professional has enquired whether a geographical dispersion allowance, intended to compensate for the use of a private vehicle during home visits, is exempt from tax. The Directorate General for Taxes (DGT) has ruled that it may be exempt provided the limits and conditions set out in the Income Tax Regulations are met.

The question raised

Application of Article 9.A.2 of the Personal Income Tax Regulations.

The DGT's ruling

The geographic dispersion allowance may be considered a tax-exempt allowance for travel expenses if it compensates for travel away from the workplace to perform duties in different locations. When using a private vehicle, the exemption is limited to a calculation of 0.19 euros per kilometer traveled, plus toll and parking expenses, provided that the reality of the travel is justified. Any excess over these limits shall be subject to taxation.

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