Can I Deduct The Cost of Parking?
If your office is in the centre of a city, you have asked yourself: “Can I deduct the cost of parking?” In places with little parking space, renting a parking space is essential, both for your employees and your clients.
In addition to offering an extra service to your product, you avoid delays caused by looking for a place to leave the car.
In this article, we will see whether this rental expense is deductible or not in Spain’s personal income tax and VAT. Here are the details…
1. Deduct the cost of parking in IRPF
In this tax, we consider the Corporation Tax (IS) rules of deductible expenses. Therefore we will move to the specific legislation of this tax.
What does the law say?
The IS law says in its article 14.1 that:
“they will not be considered fiscally deductible expenses [.] e) Donations and liberalities.
This paragraph e) shall not be understood to include expenses for public relations with customers or suppliers, nor those incurred in accordance with the uses and customs concerning company personnel, nor those incurred to promote, directly or indirectly, the sale of goods and provision of services, nor those that are correlated with the income”.
Therefore, as the expenses for renting a car parking are considered public relations with clients, and for employees, it may be considered use and custom, they may be deducted in the IS and, therefore, also in the IRPF.
2. Deduct the cost of parking in VAT
What does the law say?
Concerning this tax, the VAT law says in its article 95 that:
“Businessmen or professionals may not deduct the fees borne or paid for the acquisitions or imports of goods or services that are not directly and exclusively affect your business or professional activity.
Two. The following shall not be understood to be directly and exclusively affected by business or professional activity, among others:
5. The goods intended to satisfy the personal or particular needs of business people or professionals, their families or their dependents, except for those intended for free accommodation in the premises or facilities of the company for the personnel in charge of their surveillance and security, and for the economic and socio-cultural services of the personnel at the service of the activity”.
From this, it follows that since parking spaces are considered assets to meet the needs of the staff and, therefore, are not directly and exclusively assigned to the activity, they will not be deductible in any amount.
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