Not everything with wheels and gasoline is suspicious. If your van is your work vehicle, you have the right to deduct it from your income tax. Do you use a van for your professional activity? The Central Economic-Administrative Court (TEAC) has clarified that you don't have to be a transport company to deduct expenses.
For years, the Administration's rigid and restrictive interpretation of the allocation of vehicles to economic activity has meant that thousands of professionals - bricklayers, plumbers, electricians and other trades - have seen how they have been systematically denied the deduction of expenses associated with their van or mixed vehicle, for not meeting the requirement of exclusive use.
Today we inform you of a relevant interpretative shift: the Central Economic-Administrative Court (TEAC), in a resolution issued on June 24 (00/04214/2024), disavows the criterion maintained by the AEAT and recognizes that mixed vehicles can be considered as being related to economic activity even if there is an accessory and clearly irrelevant.
What exactly does the TEAC resolve?
The case analyzed starts from a taxpayer who carries out the plumbing activity and who used a Dacia Dokker van as an essential tool to transport materials, tools and other elements of his work.
The Spanish Tax Agency (AEAT) had denied the deduction of vehicle expenses (fuel, maintenance, parking, etc.) in the 2019 Personal Income Tax return, arguing that there was insufficient evidence that the vehicle was used solely and exclusively for professional purposes. Even the fact that the self-employed individual owned another car for personal use was not enough for the Tax Agency, which demanded impossible proof and rejected any deduction.
The Madrid Regional Economic-Administrative Court (TEAR) already ruled in favor of the taxpayer, but it was the Central Economic-Administrative Court (TEAC), when resolving the appeal for unification of criteria filed by the Spanish Tax Agency (AEAT), that established the doctrine and changed the rules of the game: The mixed-use vehicle is presumed to be related to economic activity if its physical characteristics (bodywork, signage, usual load) and the activity of the owner point to a work use, unless the Tax Agency proves that its use is mainly private.
Why is this resolution relevant?
Because it reverses the burden of proof: until now, it was the taxpayer who had to prove every last detail that their vehicle was used exclusively for business purposes. Now, if the vehicle has a professional form, use, and function, it is presumed to be used for business, and the tax authorities will have to prove otherwise.
This change has significant practical implications for self-employed individuals and professionals whose activities involve the mobility and transport of tools, materials, or machinery. Specifically, it positively affects those who:
- They use adaptable mixed vehicles (vans, pick-ups, combis…);
- They perform jobs where the vehicle is essential to operate (construction, installations, repairs);
- They have another vehicle clearly intended for personal use.
What are the consequences for income tax?
If the vehicle is presumed to be used for economic activity, the professional may:
Deduct expenses directly related to said vehicle:
- Fuel
- Repairs
- Amortization
- Sure
- Tolls and parking
- Spare parts and maintenance
- Rates and taxes related to professional use
Provided that such expenses are duly justified by a full invoice and can be linked to the vehicle (for example, that the registration number is shown on the parking receipts).
What conditions must be met to apply this doctrine?
- Mixed-use adaptable vehicle: that is, a vehicle designed to transport both people and goods (up to 9 seats), in accordance with the Traffic Regulations.
- Use clearly linked to the activityAspects such as the following will be considered:
- Regular loading of tools or materials.
- Exterior signage.
- Obvious wear and tear from work use.
- Having another car for personal use.
- Irrelevant and accessory private use: for example, driving the vehicle outside of working hours or moving it occasionally for personal reasons does not cancel the impact.
- Activity carried out: the resolution focuses not so much on whether the self-employed individual transports goods belonging to others (as the Spanish Tax Agency (AEAT) argued), but rather on whether the vehicle is intended for transporting "things" necessary for their work. And on this point, the Central Economic-Administrative Court (TEAC) clarifies that the concept of "goods" should not be interpreted restrictively.
A change of approach compared to the previous criterion
The Spanish Tax Agency (AEAT) had been arguing that the exceptions in Article 22.4 of the Personal Income Tax Regulations (deduction without exclusivity requirement) could only be applied to those who professionally engaged in goods transport activities. This excluded plumbers, bricklayers, and electricians, even if they used their vans solely for work.
The TEAC rejects that view. The key is not the specific professional activity, but the vehicle's functional purpose. If you use it to transport what you need for your work, the vehicle is suitable. Period.
What if the tax authorities say no?
The ruling also establishes that the tax authorities can rebut the presumption of business use, but to do so they must prove that the vehicle is used primarily for personal purposes. It is no longer sufficient for there to be doubts or for the taxpayer to lack conclusive evidence: the burden of proof now falls on the tax authorities.
This means that expense deductions cannot be denied based on mere suspicions or assumptions. Solid evidence will be required to prove that the primary use of the expense was non-professional.
This ruling is good news for the self-employed and professionals in manual or technical trades. The Central Economic-Administrative Court (TEAC) has opted for a reasonable interpretation consistent with social reality, allowing for the professional use of a vehicle to be proven without having to be detailed down to the last detail if it is already evident from its characteristics and function.
However, this doesn't mean anything goes: expenses must still be justified, receipts kept, and behavior consistent with professional use must be maintained. But the evidentiary burden has been lowered, and the interpretation is no longer so restrictive.
You can contact this professional office for any questions or clarifications you may have.
Warm regards,
Do you have any questions about this topic?
Our team of expert advisors will help you resolve any issues related to our services.
Contact us now
A Àmbit Assessor, SL has 40 years dedicated to the tax, comptable and labor consultancy of the Pime.
Latest entries from MGI Àmbit
(see all)
Related
