The 2021-2022 Income campaign is already here. For the self-employed, it coincides with the filing of taxes for the first quarter of the year, which makes these weeks one of the most intense in terms of procedures for the almost 4 million Spaniards who work on their own.
Among the most common doubts, it is always highlighted what expenses and what cannot be deducted by a self-employed person for Income and Personal Income Tax. Some questions that we answer below.
Requirements for an expense to be deducted from Income
There are a series of minimum and common requirements so that an expense can be deducted without risk to be reviewed by the Treasury. To do this, you must meet three conditions:
-Be related to the activity of the self-employed.
-It must be possible to justify it by means of an invoice.
-And it has to be registered in the book of expenses and investments of the self-employed person.
What expenses are deductible for the self-employed when presenting the Income
Knowing this opens up the range of different types of expenses that the self-employed can deduct, which are the following:
-Social security: The fees that are paid month by month are deductible. This concept includes all contributions to the Special Scheme for Self-Employed Workers (RETA), as well as those made by each of the workers on the payroll. In addition, contributions to social security mutuals can also be included.
-Operation consumption: Gasoline and merchandise necessary to carry out the work are included here, in addition to raw and auxiliary materials, as well as other current acquisitions of goods made from third parties.
-Domestic supplies: If the self-employed person teleworks, a percentage of the electricity, water and internet supplies in their home can be deducted. These professionals may deduct 30% of household supplies, such as electricity and water.
-Leases and royalties: From the premises to the coworking. This concept includes the cost of renting the work space.
-Wages and salaries: this concept is reserved for self-employed employers, since it refers to the remuneration paid to business workers, which includes allowances, trips, salaries in kind, prizes and other payments to the workforce.
-Other personnel expenses: this includes any payment in favor of employees that was not included in the concept ‘wages and salaries’. Specifically, it refers to expenses derived from training, indemnities for termination of contract, personal accident insurance, gifts, as well as contributions to pension plans or corporate social welfare plans.
-Repairs and conservation: this includes the maintenance and repair expenses of the self-employed means of production.
-Services of independent professionals: this concept allows deducting the expenses derived from services contracted to other professionals such as lawyers, auditors or notaries, among others.
-Expenses for subsistence allowances: the self-employed can deduct 26.67 euros for each day worked outside their municipality, 48 euros in the case of foreigners. This figure will increase to 53.34 euros per day when the professional stays overnight, 91.35 euros when it comes from abroad.
-Other foreign services: advertising, transport, banking services and other related items can be included in this section.
-Fiscally deductible taxes: this concept includes both the real estate tax (IBI) and the economic activities tax (IAE). In addition, other expenses such as taxes, surcharges and fees can also be added.
-Input VAT: this concept is reserved for the self-employed who do not submit quarterly VAT returns.
-Financial expenses: this section allows you to include expenses derived from interest on loans and credits, and other financial concepts related to the deferral of debts that are not related to the self-employed capital.
-Amortizations: this concept includes all the expenses derived from the deterioration or depreciation of the investments cataloged in tangible or intangible fixed assets.
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