How to Deduct Vehicle Expenses as a Freelancer? AEAT Requirements
One of the most common questions for freelancers is whether they can deduct their vehicle expenses: the purchase, fuel, insurance, repairs... The answer is yes, but with very important nuances. The Spanish Tax Agency (AEAT) is extremely strict on this issue, and a mistake can lead to an audit and penalties.
The key to everything is the principle of allocation to the economic activity. For an expense to be deductible, the asset must be used to generate income. In the case of a vehicle, the Tax Agency clearly distinguishes between deductions for Personal Income Tax (IRPF) and VAT (IVA).
Deducting Vehicle Expenses in Personal Income Tax (IRPF)
To deduct any expense related to your vehicle in your IRPF return (purchase, depreciation, fuel, maintenance, etc.), the AEAT requires full and exclusive allocation to your professional activity. This means you cannot use the vehicle for private purposes at any time.
Proving this exclusivity is very difficult for a conventional passenger car. However, the law presumes a 100% allocation in the following cases:
* Mixed-use vehicles for transporting goods.
* Vehicles for providing passenger transport services (e.g., taxis, VTCs).
* Vehicles for providing driving instruction services (e.g., driving schools).
* Vehicles used by registered commercial agents or representatives for their professional travel.
* Surveillance vehicles.
If your activity is not on this list and you use a regular passenger car, you will not be able to deduct any expenses for IRPF. The Tax Agency assumes that there is always a possibility of private use.
Deducting VAT on the Vehicle and its Expenses
The VAT regulations are more flexible. The law presumes that if you use the vehicle for your activity, it is 50% allocated. This allows you to deduct:
* 50% of the VAT paid on the purchase of the vehicle.
* 50% of the VAT on running costs: fuel, repairs, tolls, parking, etc.
Is it possible to deduct 100% of the VAT? Yes, but you must be able to prove to the AEAT that the allocation is total. To do this, you will need strong evidence such as:
* Having another vehicle for exclusively personal use.
* Branding the vehicle with your company logo.
* Mileage logs, client visit schedules, or GPS tracking systems.
The Importance of Justification and VeriFactu
To deduct any expense, it is essential to have a full invoice in your name. Receipts or simplified invoices are only useful for justifying the expense itself, but not for deducting the VAT.
Furthermore, with the imminent arrival of verifiable invoicing systems, control over accounting records will increase. Remember that, as a freelancer, you must have software adapted to the new regulations by July 1, 2027. Proper management of your expense invoices will be crucial to defend your deductions in any review. To better understand the deadlines and obligations, you can consult our complete guide on VeriFactu 2027: Deadlines for Freelancers in Spain.
In summary, unless your activity allows you to justify exclusive allocation, the general rule is: 0% deduction for IRPF and 50% deduction for VAT on your vehicle expenses.