Know How Series... Tax deductions for Autonomos
Essentially an expense is allowable if it is necessary to carry out the business or profession but take a look at the item by item guide.
The golden rule is OBTAIN AND KEEP PROPER INVOICES. This might seem patronising, particularly if you are not new to business, but it is worth emphasising. Even if you are not sure whether something is allowable or not it is worth retaining an invoice and asking.
Nothing can be claimed without a proper VAT invoice with your name and NIE on it. A shop receipt or a delivery note, even if it has the correct amount on it and VAT will not do, it has to have your details and NIE on it. If you are buying from a shop it is generally necessary to take your till receipt to Customer Service and ask for a proper invoice (a factura) in your name.
You can claim deductions on your tax return for the following, with some additional detail for the more controversial or complex categories:
Social security contributions
Accounting and tax services
Trade or professional association fees/subscriptions
Rent (If the autonomo has an office, shop or other premises then the rent is allowable, so long as there is a proper IVA invoice. Note that rent paid will be subject to retencion deductions, which have to be paid over to the Tax Office quarterly as advanced income tax payments on behalf of the landlord.
Heating, light and water - utilities and insurance can be claimed on business premises.
Office furniture and supplies
Software and internet services
Advertising and promotional materials
Car or van (If a car or van has been bought specifically for the autonomo's business and is used exclusively for it, then the cost is allowable. The VAT is reclaimable right away but the allowable expense for income tax purposes is spread over 8 years (12,5% of the cost is deducted every year). If an autonomo is using his or her personal car for work purposes then the cost of the car is not generally allowable even on a proportional basis.)
Car insurance, maintenance and service costs (If a car is allowable as a capital expense (see above) then these running costs will also be claimable. Otherwise they are not because it is assumed they would have been incurred anyway for personal use.)
Petrol (If you get a proper invoice for petrol you put in your car for a business journey then this can be claimed even if your car is not deemed exclusively autonomo use.)
Other travel - Train, taxi, parking, flights etc are allowable if demonstrably for business purposes but again proper invoices in your name are required.
Telephone and internet (If a mobile, telephone line or internet connection is used primarily for the autonomo business it is generally allowable. If you have a private phone line and a private mobile besides your business one then the business costs will be allowable. As always, proper invoices in the name of the autonomo are required.)
Entertaining - Generally business meals where clients or other business contacts are present would be allowable but with a proper invoice being required.
Daily expenses - As from 2018, the self-employed are allowed to claim up to €26,67 a day for direct expenses on food and drink, but only on working days. Payment must be made either electronically. It can be deduced if it’s not in your municipality.