What are the deductible expenses in the VAT

For many entrepreneurs, taxes are a great puzzle that must be solved, especially at the beginning of their business career. The Spanish tax system is, of course, very extensive and is full of exceptions and concrete situations that must be resolved. One of the most important taxes, and that affects both employers and consumers is VAT, the Value Added Tax. To clear some doubts, in this article of .com we will explain which are the deductible expenses in the VAT.

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Requirements for a supported VAT to be deductible

The VAT that an employer can deduct is the input VAT, that is, as its own name indicates that which has been supported by the company itself in the management of its activities. More simply: the VAT that the company has had to pay.

Not all the VAT supported by a company is necessarily deductible. For this to happen, it must meet a series of requirements:

  • They must be expenses directly related to the economic activity exercised.
  • The expense must be duly justified by receipts, original invoices or other documents that can prove it.
  • The expenses must be correspondingly recorded in the accounting books of the company.

What are the deductible expenses for VAT

The fact that an expense meets all the above requirements does not mean that your VAT can be deducted. Only a series of expenses related to the business activity can be subject to deduction of the tax. These expenses are:

  • All those materials and consumables necessary to carry out the economic activity and exploitation of the business.
  • Social Security Fee.
  • Salaries of the workers.
  • Acquisition of fuel.
  • Leases and fees of the place where the activity takes place.
  • Services of professionals, here we could include a great variety from lawyers and architects to plumbers or electricians.
  • Investment assets, including vehicles used in the activity.
  • Transport of the worker to the workplace, when the company must provide it by agreement.
  • Clothing, including only gowns or uniforms that contain the name or logo of the company.