This Tuesday the rent campaign begins. From today until June 30, all people who have deposited more than 22,000 euros from a single payer or 14,000 euros from several payers are required to submit the 2022 income statement. As in previous years, one of the aspects that most doubts cause taxpayers is related to the car, both for what refers to the acquisition of a new vehicle and its use in the case of self-employed workers.
Regarding the purchase of a new car, it must be made clear that it is not necessary to declare the acquisition because at the time of doing so, the corresponding taxes are already paid. However, it is interesting to state in the declaration if you can deduct the expense, depending on whether you are an individual, a self-employed person or a company, as RACE explains in his blog, where he specifies each of the situations.
The RACE reminds that if you have your own car and work for someone else you should not record the purchase of a new vehicle because you will not be able to deduct it. However, there are some exceptions for disability and large family.
Handicap. People with a disability equal to or greater than 33%, whether the driver or a dependent family member, can deduct up to 4% of VAT from the purchase invoice, provided that a deduction of 4 has not been requested. years for another vehicle. These people are also exempt from paying the circulation tax and the registration tax.
Large family. Up to 50% of the registration tax can be deducted, as long as the car is in the name of the parents and a deduction has not been requested in four years with another vehicle. In the case of VAT, there is no reduction.
When declaring the purchase of a car as self-employed, it is necessary to differentiate the self-employed persons dedicated to transport from those who work in other sectors. The tax advantages both for the acquisition of a new car and for its use are not the same for people who use the vehicle exclusively for the performance of their professional activity -taxi drivers, for example- than for the rest of the professionals who work for own account and use the car to get around during their workday.
The self-employed who are part of this group are carriers, taxi drivers, delivery people, commercial agents, driving school teachers… That is, those people who use the car to work and earn an income. As long as the car is in the name of the self-employed person, up to 100% VAT can be deducted on expenses, including fuel.
In this group we find the self-employed whose work is not related to transportation. If they use the car for work, up to 50% of the repayment, interest and VAT can be deducted. They can also reduce up to 50% of fuel costs. To access this series of benefits, the worker must demonstrate that professional use of the vehicle by providing the list of clients or justifying that they must travel often as part of their activity.
The company car is the vehicle that a certain company acquires so that one or more of its employees can use it, either as part of their salary or not. Depending on who owns it and the use made of it, it will have to be included in one way or another in the declaration.
In this case, it is the company that can deduct an annual percentage of the cost of acquiring the vehicle. You can also benefit from the expenses and taxes levied on the operation.
When the worker uses the company car for his private life, it is a payment in kind. That is, the vehicle is part of the salary and has tax benefits. It will be necessary to pay 20% annually on the market value, including the expenses and taxes of the acquisition, which would correspond to the vehicle if it were new. The reduction that is applied to that market value is related to the energy efficiency and the price of the car.
Deduction of 15%. Vehicles that do not exceed 120 g/km in C02 emissions with a price not exceeding 25,000 euros.
20% deduction. Hybrid or internal combustion vehicles of auto gas, LPG and natural gas up to 35,000 euros.
Deduction of 30%. Battery electric vehicles (BEV), extended range electric vehicles (E-REV), plug-in hybrid electric vehicles (PHEV) with a minimum range of 15km and a price of no more than 40,000 euros.
