The Declarando platform, in a new installment of its legal observatory, clarifies the procedure and the requirements that self-employed workers must meet in order to be deducted fuel costs in VAT and personal income tax returns. All this according to the latest binding consultations of the General Directorate of Taxes and a recent resolution of the Superior Court of Justice of the Valencian Community.
The latest binding inquiries, submitted to the General Directorate of Taxes, have introduced a novelty in the requirements that must be met by the invoices of the self-employed who want to deduct fuel costs. In this way, It is not necessary that the invoice of the expense shows the vehicle’s license plate to be able to practice the deduction.
This resolution is due to the fact that this field does not appear in the provisions of art. 6 of Royal Decree 1619/2012, which regulates billing obligations and establishes the minimum content that the invoice must have to be considered a deductible expense.
“Now, as the Tax Agency itself points out, it falls to the self-employed person to responsibility to prove that said expense is linked to the income from their activity. In other words, there is a correlation or a causal link between spending and income ”, explains Marta Zaragozá, CEO of Declarando.
“Therefore, the fact that the vehicle registration number appears on the invoice may be one more way of proving that said expense is linked to the activity and to the vehicle that is in the name of the self-employed person, along with other means of proof, how to keep a mileage control or carry the vehicle labeled”.
Insurance agents
Another novelty related to the deduction of fuel expenses in self-employment is the one that has been introduced in the sentence that has just been published by the Superior Court of Justice of the Valencian Community (sentence 382/2021, of April 30, 2021, Chamber of Contentious Administrative Law), which recognizes the right that the activities of insurance commercial agent and insurance brokers, the presumption of affectation of the vehicle in their economic activity is also applied and can be deduct these expenses 100%.
This ruling obliges the Administration to prove that the impact is less in order to impose a lower deduction of input VAT.
In general, Declarando recalls that fuel is a deductible expense for the self-employed, provided that the use of the vehicle is related to the professional activity of the worker. This deduction percentage may be 50% or 100% depending on the nature of the professional activity carried out by the self-employed person and the use, private and professional or exclusively professional, made of the vehicle.
Hacienda allows always deduct up to 50% of vehicle expenses if the self-employed meet any of these three simple requirements:
- Have the vehicle rental invoice in the name of the worker
- Have the fuel bill in the name of the self-employed
- Be the owner of the vehicle on which the deduction is applied
If the deduction percentage is greater than 50%, The requirements imposed by the Treasury are more demanding since, in the event of an inspection, the self-employed must demonstrate to what extent they use the vehicle for their professional activity through a control book of kilometers traveled for work, which must be accompanied by a Photograph that reflects the kilometers the vehicle had at the beginning of the exercise.
However, the legislator establishes a list of activities that, by their nature, allow their workers to deduct 100% of their fuel costs. These activities are as follows:
- Mixed vehicles used in the transport of goods.
- Those used in the provision of passenger transport services through consideration.
- The vehicles of services of education of conductors or pilots by means of consideration.
- Those used by their manufacturers in conducting tests, trials, demonstrations or in sales promotion.
- Those used in the professional travel of commercial representatives or agents.
- Vehicles intended for surveillance services
