Companies selling business-use vehicles must apply VAT according to their percentage of business use

Managing company assets requires precise control over how goods are assigned to economic activities, especially regarding vehicles. A recent resolution from the Dirección General de Tributos (DGT) has specified the tax treatment that must be applied when transferring these assets to avoid errors in the settlement of Value Added Tax (IVA).

What the DGT has ruled

The DGT establishes that the transfer of a vehicle is subject to IVA as long as the asset is part of the business or professional assets. The key point lies in proportionality: if the vehicle has partial business use, the taxable base of the delivery must be calculated solely based on that percentage of business use.

For example, in the case of passenger cars where a presumed percentage of business use is usually applied, the portion of the vehicle's value not linked to the economic activity falls outside the scope of this tax. Furthermore, the resolution reminds that the sale entails the obligation to perform the regularization of the deduction taken at the time of acquisition, in accordance with current regulations.

What this means for you

If your company or professional activity has vehicles that are not used exclusively for business, selling them does not imply a full invoice with IVA. The operational impact is as follows:

• Reduced taxable base: IVA will only be applied to the portion of the price corresponding to the percentage of business use.
• Partial non-subjectivity: The portion of the vehicle's value not assigned to the activity is not subject to the tax.
• Regularization obligation: You must verify whether it is necessary to make adjustments to the IVA deductions that were applied when the vehicle was purchased.

What should be done

When selling this type of asset, it is necessary to determine exactly the percentage of business use that has been applied in the accounting and in the IVA returns. It is essential to cross-check the percentage of business use with the regulations of Law 37/1992 to ensure that the taxable base of the sale is correct and to avoid possible requests from the Administration due to an incorrect settlement of the tax.