Self-employed individuals must prove the correlation between laboratory costs and their income

The deductibility of operating expenses is one of the main points of friction in the tax management of self-employed professionals. Recently, the Dirección General de Tributos (DGT) has specified the requirements necessary for costs derived from laboratory activities to be considered deductible expenses in Personal Income Tax (IRPF).

What the DGT has ruled

The ruling focuses on the possibility of deducting laboratory costs when using the simplified direct estimation method to determine net yield. The Administration's criteria establish that, for these expenses to be accepted, they must meet the following requirements:

• Correlation with income: It must be proven that the expenses were incurred in the exercise of the activity and are directly related to the generation of income.
• Documentary justification: Costs must be properly justified and recorded in the accounting records or the corresponding books.
• Temporal imputation: They must comply with the imputation rules for the corresponding tax year.

The DGT emphasizes that the existence of such correlation is a matter of fact, which means that the burden of proof lies with the taxpayer and its verification is at the discretion of the management and inspection bodies.

What this means for you

If you are a self-employed professional performing activities that require laboratory costs, simply possessing the invoice for the expense is not enough. The regulations require a causal link to exist between that outlay and the generation of income from your economic activity. The lack of clear traceability demonstrating that the laboratory expense is necessary to produce your income could lead to the rejection of the deduction by the Tax Agency.

What you should do

To ensure the correct deductibility of these costs, it is necessary to maintain rigorous control of the documentation. It is fundamental that the accounting accurately reflects the purpose of each expense and that the direct relationship with the business volume can be demonstrated. Since the assessment of correlation is a matter of fact, each situation requires a detailed analysis of the business operations to avoid contingencies in an eventual inspection.