What can I deduct?

You can deduct the VAT payments paid in Spanish VAT territory for the purchase of goods and services that are used for business or professional activity.In the case of current assets, they must be used exclusively in the activity, while the fees incurred in the acquisition of investment assets will be deductible in proportion to the degree to which they are used.

VAT paid on the purchase or leasing of vehicles, their trailers, mopeds or motorbikes, mixed and off-road vehicles, that are used in the development of a business or professional activity, can be deducted by 50 percent, as the VAT law presumes a degree of use, unless you can prove a higher degree of use.

However, in the case of the following vehicles, the presumption of use for the activity is 100 percent, so you can deduct the full amount:

• Vehicles of mixed use that are used for the transport of goods.

• Those used for the transport of passengers, and driver or pilot training.

• Those used by their manufacturers for testing, trials, demonstrations or sales promotion, by sales representatives or agents in their professional travels and those used in surveillance services.

The degree of use in the activity must be proven by any means of evidence.

Even if the following goods and services are used in the activity, it is not possible to deduct the input VAT paid on their purchase:(unless they are the object of your activity or are for exclusive industrial, commercial, agricultural or scientific use):

• Jewellery, gems, precious natural or cultured stones, articles made from gold or platinum.

• Food, beverages and tobacco.

• Entertainment and recreational services.

• Goods or services intended as hospitality for customers, employees or third parties (e.g. Christmas hampers for employees).(This does not include free samples, nor advertising objects of low value (requirements in art.7.2 and 4).

• Travel, hotel and restaurant services, unless the corresponding expense is considered deductible at IRPF or IS.