- The Spanish tax authority (DGT) says the 50% VAT deduction allowed for a vehicle’s purchase does not automatically apply to fuel, repairs, maintenance, or other related expenses.
- Each related expense must be assessed separately, and VAT is deductible only to the extent it is proven to be used for business activity.
- Insurance premiums are not deductible because insurance is VAT-exempt, and fees/taxes generally do not generate deductible VAT.
- The ruling relies on Article 95 of the Spanish VAT Law and an EU court case distinguishing vehicle acquisition from operating costs.
Source: allyon-etl.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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