Spain’s TEAC Ruling on VAT Deductibility for Mixed-Use Leased Vehicles

• Spain’s Tribunal Economico Administrativo Central issued a resolution on VAT deductibility for mixed use leased vehicles
• Previously from 2015 to 2017, entities could deduct 50% of the VAT on leased vehicles, which increased to 100% in 2018 with an assumption of 60% private use
• Spanish tax authorities challenged these deductions, claiming high private use by employees
• The case involved a company deducting 50% VAT based on the legal presumption of 50% business use
• Tax authorities required tangible evidence like fuel records and use logs to prove actual business use
• They determined business use percentages between 20% and 40% based on vehicle availability outside working hours
• TEAC highlighted the need for coherent and factual evidence to support business use claims
• TEAC ruled that VAT deductibility should align with actual business use, maintaining the general 50% presumption if evidence is lacking
• BDO Insight notes the importance of solid evidence to support VAT deductibility in cases of mixed vehicle use

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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