Expenses for renting seats for customers are subject to a 1% deductibility limit

The deductibility of expenses aimed at customer loyalty has been analyzed by the Dirección General de Tributos (DGT). In a recent binding ruling, the body has specified the tax treatment applicable to the rental of seats with the objective of retaining or attracting customers.

What the DGT has resolved

The DGT determines that expenses derived from renting seats to foster customer loyalty are classified for tax purposes as customer amenities. For these amounts to be deductible in Corporate Tax (Impuesto sobre Sociedades), they must comply with the general requirements of current regulations, such as correct accounting registration, compliance with the accrual principle, their correlation with income, and proper documentary justification.

However, the resolution highlights a fundamental quantitative limitation: these expenses are subject to a limit of 1 percent of the net amount of the turnover for the corresponding tax period. Likewise, the entity must be able to prove, through reliable means of evidence, that said seats are exclusively allocated to serving its customers.

What this means for you

If your company makes this type of investment to maintain the loyalty of its customer base, you must keep in mind that there is no unlimited deductibility. The expense is conditioned by the company's sales volume, which implies that an increase in this type of amenity might not be fully deductible if it exceeds the 1% threshold of the turnover.

The burden of proof lies with the company. The existence of an invoice is not enough; it is necessary to demonstrate the exclusive allocation of that resource to loyalty activities to prevent the Administration from considering the expense as non-deductible or as an activity unrelated to the corporate purpose.

What should be done

It is necessary to perform rigorous monitoring of the relationship between these loyalty expenses and the turnover to ensure they remain within legal margins. It is recommended to maintain exhaustive documentation that allows for the justification of the exclusive allocation of these seats to customers, complying with the provisions of the Corporate Tax Law (Ley del Impuesto sobre Sociedades) and the General Tax Law (Ley General Tributaria).