Spain’s Supreme Court: No VAT on Company Cars Provided to Employees for Private Use

• Spain’s Supreme Court ruled that providing a company car to an employee free of charge is not subject to VAT
• Tax authorities previously required VAT to be charged on the value of the benefit in kind provided to employees
• The Supreme Court decision was based on a 2021 CJEU ruling that distinguished between providing a vehicle with or without consideration
• The provision of a vehicle used 50% for business purposes to an employee for private use is not subject to VAT if no payments are made in return
• Spanish companies providing company cars to employees should review their policies and assess the implications of the ruling

Source: bdo.global

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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