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Practical Income Manual 2022.

6. Tax deductible taxes

Included within this category are the following concepts that appear differentiated in the Personal Income Tax declaration

a. VAT supported

will not included in the deductible expenses of the economic activity carried out

On the contrary, must be included ##1##within the deductible expenses of the economic activity carried out: VAT , including, where applicable, the equivalence surcharge, borne in said operations, the amounts of which are not deductible in the self-assessments of the VAT of this tax. Among other assumptions, this circumstance will occur when the economic activity carried out is subject to the following special VAT regimes:

  • Special Equivalence Surcharge Regime.

    The special equivalence surcharge regime is regulated in Chapter VII of Title IX of Law 37/1992, articles 148 to 163.

    Taxable persons subject to this special regime are not obliged to carry out the settlement or payment of the VAT accrued corresponding to their sales. Said payment is made through the “equivalence surcharge” that must be passed on to their suppliers, along with the ordinary VAT fee.

    Therefore, it is the suppliers who pass on to the retailer the equivalence surcharge on the invoice, the corresponding VAT plus the equivalence surcharge and pay it in.

    Nor can they deduct the fees incurred for the acquisition or import of goods of any nature or for the services that have been provided to them, to the extent that said goods or services are used in carrying out the activities affected by this special regime. .

    Therefore, the input VAT and the equivalence surcharge will be deductible expenses.

  • Special regime for agriculture, livestock and fisheries.

    Taxable persons covered by the special regime are not obliged to liquidate, charge and pay VAT, therefore they cannot deduct the fees incurred for the acquisition and import of goods and services used in carrying out the activities to which it is applicable. application of this regime.

For its part, the input VAT corresponding to the acquisition of elements of the fixed assets assigned to the activity that is not deductible in this last tax, must be integrated as the greater acquisition value of said elements, for which will be considered as an expense in the Personal Income Tax will be made through the corresponding amortizations .

b. Other tax deductible taxes

This concept includes non-state taxes and surcharges, parafiscal levies, rates, surcharges and special state contributions that are not legally passable, provided that they affect the computed returns, do not have a sanctioning nature and correspond to the same year as the income. Examples of non-state taxes are the Tax on Economic Activities ( IAE ) and the Tax on Real Estate ( IBI ) corresponding to the economic activity carried out.

Criminal and administrative sanctions, surcharges for the executive period and the surcharge for late declaration without prior request are not considered deductible expenses.