Non-Deductibility of VAT on Free Vehicle Use by Employees for Personal Needs

• VAT on vehicles given to employees for personal use is not deductible.
• This is based on articles 95 and 96 of the IVA Law.
• The use of vehicles for non-business purposes does not allow for VAT deduction.
• This is in line with article 7.7 of the IVA Law.
• The decision is consistent with a previous resolution from January 28, 2025.
• The previous case involved vehicles considered as investment goods.
• Relevant law: Law 37/1992 on Value Added Tax IVA.

Source: serviciostelematicosext.hacienda.gob.es

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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