VAT has been borne on acquisitions of goods or services used in the business or professional activity.

The Law regulating VAT establishes that the fees borne or paid for the acquisition or import of goods or services carried out without the intention of using them may not be subject to deduction, to any extent or amount. in the performance of business or professional activities, although subsequently said goods or services are totally or partially affected by the aforementioned activities.

In this section, a distinction must be made between whether or not these are investment goods (see the concept of investment goods later in this chapter):

1. If it is non-investment goods or services .

   In order to be able to deduct the incurred taxes, the goods or services must be used directly and exclusively in the business or professional activity.

   The following are not understood to be directly and exclusively affected by the activity, among others:

   • Goods used alternatively or simultaneously in business or professional activity and in other activities.

   • Assets or rights that do not appear in the accounting or official records of the activity.

   • Assets and rights that are not part of the business or professional assets.

   Example:

   If a computer costing 1,000 euros or a telephone is used simultaneously for business and private purposes, the incurred contributions cannot be deducted to any extent.

2. If it concerns fees incurred in the acquisition, importation, leasing or transfer of use of investment goods that are used in whole or in part in business or professional activity, or if it concerns the following goods or services directly related to the investment goods:

   • Accessories and spare parts.

   • Fuels, lubricants and energy products necessary for its operation.

   • Parking services and use of toll roads.

   • Rehabilitation, renovation and repair of capital assets.

   • Supplies and other current expenses of real estate. (TEAC Resolution of July 19, 2023 - RG 00/06654/2022)

   At this point 2, the following rules must be taken into account:

   1. following are not deductible in any way:

      • Assets or rights that do not appear in the accounting or official records of the activity.

      • Assets and rights that are not part of the business or professional assets.

   2. Partially deductible are the amounts supported by assets used, alternatively or simultaneously, in business or professional activity and in other activities.

      For this point 2 to be applicable, it is necessary prove the affectation , at least partial, to the activity and once the affectation has been proven, the presumptions or the justification of the degree of affectation will come into play.

   Finally, in this point 2, we must distinguish two assumptions:

   1. Passenger cars and their trailers, mopeds and motorcycles:

      • It is generally assumed that 50 percent of the population will be affected by the development of the activity.

      • There is a presumption of 100 percent affectation for certain assets: mixed vehicles used for the transport of goods, those used for the transport of passengers, in the provision of driver or pilot training services, in tests, trials, demonstrations or sales promotion by their manufacturers, in the professional travel of commercial representatives or agents and in surveillance services.

      Example:

      In order to deduct the tax incurred on the acquisition of a tourist vehicle used for private purposes and in business activity, it is necessary to prove the allocation, at least partially, to the activity and, once proven (for which any means of proof admitted by law may be used), the deduction of 50 percent of the tax incurred will be applied, unless a higher degree of use is sought, in which case it must be proven by the interested party, or a lower one, which must be proven by the Administration.

   2. Other investment assets: The contributions incurred will be deductible to the extent that they are used in the development of the activity.

      Example:

      In the case of a property that is used as a home and a professional office, the tax incurred will be deductible in the part affected by the professional activity, a reasonable criterion being the deduction in proportion to the square meters used for the activity with respect to the total square meters of the property. The fee incurred on supplies will be deductible to the extent that the property is affected by the professional activity.

These deductions must be regularized when a different degree of use is proven in the activity in accordance with the procedure for regularizing deductions for investment assets.

The degree of use in the activity must be accredited by the taxpayer by any means of proof admitted by law, without self-assessment or the accounting or inclusion of the assets in the official records of the activity being sufficient means of proof.