In this article, I will continue explaining how taxpayers must substantiate their expenses to be able to deduct them. If you missed the first part and have questions about general concepts, I recommend reading the previous article titled: “How to ensure the application of deductions in the irpf: meal expenses” before proceeding with this one.
This time, I will explain what investment goods are and the requirements set by the tax agency (Agencia Tributaria) for their deduction, specifically focusing on indivisible assets.
What are investment goods?
These are products or assets that a company or a self-employed professional acquires with the intention of using them in their professional activity over the long term.
Now that this concept is clear, let’s continue with an example. Imagine a lawyer who frequently uses a car because he has a large number of court cases outside his city that require travel. In this case, the lawyer buys a new car because he needs it for his professional activity. He already owns another car, but since it is for family use, he prefers not to use it for work purposes. As a result, he wants to deduct the cost of the new car.
According to Article 22 of the IRPF Regulations, in the case of indivisible assets, such as a car, the corresponding deduction can only be applied if the asset is used exclusively and solely for professional reasons. Additionally, this must be proven.
But how can one demonstrate that the car has not been used for other purposes and that the purchase was strictly work-related? This is where the complexity of the issue lies. Simply arguing that you are self-employed and own another vehicle is not sufficient according to legal precedent to prove that the car is exclusively used for professional activity.
However, a ruling from the High Court of Justice of Valencia determines that the vehicle deduction is applicable because the self-employed professional provided the following supporting documents, in this case, an architect:
- Work agendas covering three tax years, detailing trips, dates, and the justification for each journey;
- Photographic reports of the sites visited;
- Three Excel spreadsheets listing all the trips made, including the date, destination, justification, and kilometers traveled.
This example applies not only to cars but also to work computers, mobile phone lines, office spaces, and related expenses such as Wi-Fi, electricity, and water.
Conclusion
As we can deduce from this ruling, if we want to ensure the deduction of investment goods, we must pay attention to every detail. This means keeping invoices and documentation that justify each expense. We must also be aware that this process requires time and patience, no matter how tedious and disproportionate it may seem.
Elena Sánchez