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Practical VAT manual 2023.

Fees not deductible by law

Quotas should not be included among the exclusions and restrictions on the right to deduct.

The Law establishes that the following cannot be deducted to any extent, except in the case of goods for exclusive industrial, commercial, agricultural, clinical or scientific use, or goods intended to be delivered or transferred for a fee or services received to be provided for a fee by businessmen or professionals who regularly carry out such operations:

  1. For travel or transportation services, hotels and restaurants, unless they are considered deductible expenses for the purposes of Personal Income Tax or Corporate Tax.

  2. In food, tobacco and beverages or entertainment or recreational services.

  3. In jewelry, jewellery, precious stones, pearls and objects made of gold or platinum.

  4. In goods or services intended for customer service, employees or third parties.

    The following will not be considered as such:

    • Free samples and promotional items of little value.

    • Those intended to be delivered or transferred for use in exchange for compensation that, at a time after their acquisition, are used to serve clients, employees or third parties.