The self-employed can deduct certain expenses derived from their professional activity both in the Personal Income Tax (IRPF) and in the Value Added Tax (VAT). One of those that generate the most doubts is the cost of fuel, given the difficulties in knowing to what extent the gasoline used in a vehicle that can be used both for work and in our daily lives is deductible.
As stated by the specialized agency Declarando , the cost of fuel for a vehicle will be deductible provided that “it is an expense related to the economic activity that you develop “. It is the basis through which the rest of the deductions are articulated, but in this case it is necessary to be clear about the limits between professional life and personal life.
Depending on the use of the vehicle, 50% of these expenses or 100% may be deducted. In all cases, it is up to the self-employed person to be able to prove that the expenses incurred correspond effectively to the economic activity carried out and are not “cheating” the Tax Agency to deduct expenses that are prohibited.
The Treasury, recalls Declaring, allows deductions of 50% in the fuel expenses of the self-employed provided that two things are accomplished at the same time: that both the fuel invoice and the ownership of the vehicle are in the name of the self-employed person .
To qualify for deductions greater than 50%, it will be necessary to be even more meticulous , since the Tax Agency increases vigilance and requirements. Thus, the self-employed will have to prove when he uses the vehicle to work and when not to avoid problems with the Treasury and demonstrate that he is not trying to deduct prohibited expenses.
The best way is to take pictures of the odometer and keep a detailed account of the kilometers traveled in work activity. This will determine the cost of fuel and you will be able to demonstrate to the Treasury that you have used the vehicle more than half the time at work.
When can 100% of the fuel be deducted
The Tax Agency establishes that, depending on the nature of their activity, some professionals can even deduct 100% of the fuel expense . They are as follows:
-In the case of mixed vehicles used to transport goods.
-In the case of vehicles used for the provision of passenger transport services or teaching drivers or pilots that entail a consideration.
-In the case of vehicles used by their own manufacturers in order to carry out tests, trials, demonstrations or for sales promotion.
-In the case of vehicles used for the professional travel of agents or commercial representatives.
-In the case of vehicles used in surveillance services.