Despite the complicated situation, more than 57% of the group are very satisfied with their jobs and more than 45% of the self-employed would no doubt go back to self-employment, the same study says. Faced with this situation and with the aim of helping the Spanish self-employed, the tax experts from TaxScouts, Platform that simplifies tax filing by providing its users with a personal tax advisor, they present us with a list of 20 deductions that a self-employed person can claim.
1. Rental Costs
The cost of renting an apartment can be deducted as long as the contract is in your name and the Treasury has previously been notified on Form 036. but only a small part corresponding to the percentage used for the activity. In the case of renting premises, it is a deductible expense from income tax and VAT.
2. Expenditures for supplies (electricity, water, heating)
When renting a place specifically for the development of professional activity, all expenses for meals can be deducted.
In the case of working from home, the Treasury only allows a deduction of 30% of the total supply costs. To do this, the Treasury must have been notified that the work will be carried out from home and the service charge statement must be in the name of the self-employed person. It should be noted that 30% is applied to the percentage of square meters used exclusively for professional activities. They are income tax and VAT deductible expenses.
3. IBI, garbage quota and community of owners
This situation is similar to rent, it is an income deductible expense with the same limits. In the case of an apartment, these costs can only be deducted in the percentage corresponding to the space reserved for the activity.
4. Telephone and Internet
Both the landline telephone and the Internet connection installed in the office or business premises are deductible expenses. When working from home, self-employed people should open new and exclusive lines for the development of the activity in order to be able to fully deduct these expenses. However, if you want to keep the same number and line for private and professional use, the costs are not deductible. They are income tax and VAT deductible expenses.
5. Materials and Raw Materials
The expenses for the purchase of materials and raw materials necessary for the development of the activity are deductible and are called operating consumption. They are income tax and VAT deductible expenses.
6. Purchase and repair of capital goods (value > 3,000 euros)
Both the purchase and repair of capital goods to carry out the activity are VAT-deductible expenses. In the case of income tax on capital goods, the law prescribes depreciation. In the case of such an investment, the expenses are deductible from personal income tax and VAT.
They are IRPF deductible expenses (never VAT) but you need to know how to correctly calculate the amortization of an investment to access the deduction.
8. Marketing and Advertising Costs
As long as the self-employed person has an invoice for everything they invest in marketing and advertising to grow their business, it can count as a deductible expense. This includes advertising and marketing spend, both in digital media (e.g. Google ad campaign spend) and traditional media (e.g. brochures, catalogs and other visual promotional materials). They are income tax and VAT deductible expenses.
9. Customer and Supplier Service Costs
This effort is one of those that usually creates more doubts and problems. Customer and supplier service expenses are considered merchandising expenses and gifts delivered on behalf of the company, such as: B. T-shirts, hats, backpacks, mugs, badges, pens or company calendars. These expenses are deductible from income tax and VAT, but can only amount to a maximum of 1% of your bill.
10. Creation and maintenance of websites
The creation and maintenance of a web portal is also deductible when the invoice is issued. They are income tax and VAT deductible expenses.
11. Consulting and accounting costs
Consultation and bookkeeping costs for the self-employed are also deductible from income tax and sales tax.
12. Other professionals’ expenses
Expenses for hiring other professional groups such as lawyers, business economists, sales representatives or independent intermediaries are deductible from income tax and sales tax.
13. Financial Expenses
Card, account or transfer commissions or interest from loans and credits are also deductible from income tax.
14. Self-Employment Rate
The self-employed social security contribution is an income-deductible expense that does not require an invoice to be deducted.
15. Expenses incurred through the employment of other workers
From social security contributions by the self-employed or companies to extraordinary payments and flexible allowances, expenses for compensation, insurance and training costs, allowances or travel expenses are all deductible from the IRPF. Daily allowances and travel expenses are also deductible from sales tax in justified cases.
The per diem includes drinks prepared in hotels, bars, restaurants and gas stations. In order to have better control over spending, it is advisable to pay by credit card and request an invoice. The daily rate of allowances cannot exceed €26.67/day in the case of a stay on Spanish territory and €48.08/day abroad. For stays away from home, the amounts increase to €54.34/day for domestic trips and €91.35/day for international trips. These expenses are deductible from personal income tax and VAT.
17. Moving and trips (taxi, bus, plane, train, ship…)
All journeys, regardless of the means of transport, that are demonstrably carried out to carry out the economic activity are subject to deduction. These types of expenses are both income tax and VAT deductible.
18. Vehicles and Fuel
Expenses arising from the purchase or use of a vehicle are considered deductible from both VAT and IRPF if the vehicle is used solely for professional purposes.
Most commonly, however, the vehicle is used for two purposes: private and professional. In these cases, income tax is not deductible, but VAT is, which can be deducted at 50% on all costs related to the vehicle: repairs, parking, tolls, fuel, etc.
19. Online Tools
In the event that the self employed requires the use of online tools such as a website maintenance platform or billing software. Like the cost of creating and maintaining a website, these are income tax and VAT deductible expenses.
All insurances that are related to work, such as liability insurance, but also life insurance or private health insurance, are considered deductible expenses. In the latter case, there is a limit of 500 euros per person in the family unit. For example, up to 2,000 euros could be deducted for 4 people in a family association.
Sebastián Olivera, TaxScouts Country Manager in Spain adds: “The Spanish tax system is quite complex, especially for the self-employed, so it is important to know the deductions and requirements of your application in order to get the most out of it and not to make mistakes. “