VAT has been borne on acquisitions of goods or services used in the business or professional activity.
The Law regulating the VAT establishes that no deduction may be made, to any extent or in any amount, in respect of the input or output tax paid for the acquisition or importation of goods or services made without the intention of using them in the performance of business or professional activities, even if the goods or services are subsequently used, in whole or in part, for the aforementioned activities.
In this section a distinction should be made between investment goods and non-investment goods (see concept of investment goods later in this chapter):
For non-investment goods or services.
In order to be able to deduct input tax, the goods or services must be used directly and exclusively in the business or professional activity.
They are not understood to be directly and exclusively related to the activity, among others:
Assets used alternatively or simultaneously in the business or professional activity and in other activities.
Assets or rights that do not appear in the official accounts or records of the activity.
Assets and rights that do not form part of business or professional assets.
Example:
If you simultaneously use computer equipment that cost 1,000 euros or the telephone for a business activity and for private purposes, you cannot deduct the input tax to any extent.
In the case of input tax on the acquisition, importation, leasing or transfer of use of capital goods which are used in whole or in part in the business or professional activity, or in the case of the following goods or services directly related to capital goods:
Accessories and spare parts.
Fuels, fuels, lubricants and energy products necessary for its operation.
Parking services and use of toll roads.
Rehabilitation, renovation and repair of capital assets.
In this point 2, the following rules must be taken into account:
The following are not deductible: to any extent whatsoever:
Assets or rights that do not appear in the official accounts or records of the activity.
Assets and rights that do not form part of business or professional assets.
Partially deductible is the tax paid on goods used, alternatively or simultaneously, in the business or professional activity and in other activities.
For this point 2 to be applicable, it is necessary to prove that the activity has been affected, at least partially, and once this has been proved, the presumptions or the justification of the degree of affectation will come into play.
Finally, in this point 2, we must distinguish between two cases:
Passenger cars and their trailers, mopeds and motorbikes:
They are generally presumed to be 50 per cent affected by the development of the activity.
There is a presumption of 100 per cent ownership for certain assets:mixed vehicles used for the carriage of goods, those used for the carriage of passengers, for the provision of driver or pilot training services, for testing, trials, demonstrations or sales promotion by their manufacturers, for the business travel of commercial representatives or agents and for surveillance services.
Example:
In order to be able to deduct the tax paid on the purchase of a passenger car used for private purposes and in the business activity, it is necessary to prove at least partial use for the activity and, once this has been proved (for which any legally accepted means of proof may be used), the deduction of 50 per cent of the tax paid will be applied, unless a higher degree of use is claimed, in which case it must be proved by the interested party, or a lower one, which must be proved by the Administration.
Other investment goods: input tax is deductible to the extent that it is used in the course of the activity.
Example:
In the case of a property that is used as a home and a professional office, the tax paid will be deductible for the part used for the professional activity, a reasonable criterion being the deduction in proportion to the square metres used for the activity in relation to the total square metres of the property.
These deductions must be regularised when a different degree of use in the activity is demonstrated by adapting the procedure for the regularisation of deductions for capital goods.
The degree of use in the activity must be accredited by the taxable person by any legally admissible means of proof, without the self-assessment or the accounting or inclusion of the goods in the official registers of the activity being sufficient means of proof.