Car expenses that are deducted on your return

Some of the expenses of your car can be deducted in the income statement. We tell you what they are and all their details.

Alberto de la Torre Reyes

April 7, 2021 (2:40 p.m. CET)

The car expenses that are deducted in the income statement and you may not know

One more year, the campaign for the presentation of the Statement of income. This time, many citizens will have to do many accounts, adjust to the last detail and search in the drawers that proof of payment that we thought was lost, since the economic crisis caused by the coronavirus pandemic it has disrupted the plans of many families.

Here we tell you what they are the expenses that any citizen can be deducted related to a car. It must be borne in mind that our profession is the main limitation when it comes to making accounts, but natural persons can also access some aid. We give you all the details.

Can I deduct any expenses as a natural person?

The figure of the Physical person It is the one with the fewest opportunities when it comes to deducting some expenses related to the car.

In principle, we will not be able to benefit from the deduction in the buying a vehicle unless this is intended for the transport of people with disabilities or reduced mobility. In this context, the buyer can deduct 50 percent of the expense in VAT, although it must be taken into account that this tax is 4 percent, instead of the usual 21 percent. If it is the person with a disability or reduced mobility who drives the car and has more than 33 percent dependency, they will be exempt from paying the registration tax.

Another possibility is that your family unit is considered large family. If the car is put in the name of the parents Up to 50 percent of the registration tax may be deducted. And, furthermore, if they are registered in the registry of the Spanish Federation of Large Families 50% VAT can be deducted from it.

Company car, how is it taxed?

If you are an employed person and you cannot deduct any of the above, there is another possibility, having a company car. If this vehicle is not in the name of the company and the worker also enjoys it in his free time, The Treasury considers that said car is a remuneration in kind, for which the worker must pay.

In this case, the State tries to reward those who use efficient and ecological vehicles. Keep in mind that Hacienda will reduce the salary for which the worker must pay in a percentage calculated from the emissions of the vehicle and its price. For example, if the vehicle emits less than 120 g / km of CO2 and has cost less than 25,000 euros, the salary that the worker will have to pay will be reduced by 15 percent. If the car is a hybrid and costs less than 35,000 euros, 20 percent less salary will be taxed and, finally, if it is energy efficient, the reduction in taxation will reach 30 percent.

Another possibility is that the company has the vehicle in its name and the worker should only use it for work purposes. In this case, it will be the company that can deduct 20 percent of the total cost of the purchase.

I am self-employed, do I have any help?

If you are self-employed, surely you carry all your expenses calculated to the millimeter. Therefore, the car expenses that you can deduct are key so that the accounts come out at the end of the year. In the first place, we must be clear that in order to be able to deduct the corresponding expenses, the vehicle must be related to the professional activity of the self-employed person, so in these cases it is best to have all the invoices saved to be able to prove it in case of facing the Treasury.

Having said that, a self-employed person may be deducted up to 50 percent of the amortization installments, interest and VAT. This section also includes the leasing and renting formulas, which have been on the rise in recent years. The same happens with maintenance costs, such as fuel, from which up to 50 percent of the amount paid can be deducted. Of course, to be eligible for these grants, the vehicle must be in the name of a non-legal natural person.

Transport of people and goods, driving schools … the big beneficiaries

As with any other profession, the Treasury considers extensive tax relief for expenses directly related to the activity of the transporters of goods or people, such as taxi drivers, driving schools, security services or commercial representation.

The situation in these cases is very similar to the self-employed, although their deductions are higher. For example, in the purchase of a new vehicle, they will be able deduct all VAT. As we have said, the same happens with the leasing or renting formulas. Furthermore, in the case of fuel expenditure, the total amount thereof may be deducted.