The 2023 Income and Wealth campaign starts this Wednesday eight days earlier than last year. Between April 3 and July 1, millions of taxpayers will have to put their accounts in order with the Tax Agency. As usual, one of the aspects that generates the most doubts for taxpayers is related to the costs of purchasing and using the car.
Generally, you do not need to declare the purchase of a new or second-hand vehicle, as the corresponding taxes are paid at the time of purchase. However, for certain taxpayers, it is beneficial to include it on their return, especially if certain associated expenses can be deducted. The viability of this option will vary depending on whether it is an individual, a self-employed worker or a company, as we will see later.
People with a disability equal to or greater than 33% and the self-employed. The latter may only include the purchase of the car if they use it exclusively for the performance of their professional activity. That is, transporters, taxi drivers, commercial agents, etc.
The acquisition of a new car intended for the transportation of disabled people, whether the driver or a dependent family member, offers the right to deduct up to 50% of the VAT on the purchase invoice. It should be noted that a reduced VAT of 4% is applied instead of the 21% that the purchase of any vehicle is taxed as a general rule. Second-hand or Km 0 cars that have already been registered by the dealer are excluded from the bonus.
We must differentiate between self-employed workers who use the vehicle exclusively for work, such as taxi drivers, and those who use it for work, but it is not directly related to transportation. The former will be able to deduct the entire VAT associated with car expenses (purchase, fuel, parking tickets…).
Those self-employed who use the vehicle to work but also use it in their private life will only be able to deduct 50% of the expenses.
Self-employed workers whose vehicles are associated with the following activities can benefit from the full VAT deduction, both for the acquisition of a new vehicle and the expenses involved (fuel, maintenance, parking…):
In addition to the VAT corresponding to the purchase of the car or the rental (in this case if you use the car exclusively for work), you can deduct the following expenses: maintenance and repairs, fuel, insurance, ITV, parking, tolls and management (only for the purchase and put the vehicle in your name).
No, according to tax regulations, aesthetic or comfort improvements, such as the installation of premium sound systems or body customization, are not deductible. Fines are not deductible either.
In the eyes of the Treasury, the company car is considered part of the employee’s salary. The company may deduct up to 20% of the annual purchase cost if the vehicle is in its name (legal entity). The worker will have to pay taxes on the company car if it is in his name (a natural person) and he also uses it for his own enjoyment since it is considered performance of work or, in other words, remuneration in kind.
Yes, depending on the price and efficiency of the vehicle the deduction will be greater or less. Specifically, there are three scenarios:
