The use of vehicles in the economic activities of self-employed persons — companies (hereinafter referred to as Self-Employed Persons) raises the question of justifying a partial or full connection with the said activity. According to tax legislation, only expenses related to vehicles used in economic activities are subject to deduction, which requires the taxpayer to provide clear evidence confirming such use. This article highlights the main considerations and methods for justifying it:

1. Definition of proof of vehicle

A vehicle is considered to be used for economic activity if it is used exclusively for it or mainly in its development. In cases of mixed use (professional and personal), only the proportionate part of the professional use is deductible, provided that this can be adequately justified. The provisions on personal income tax (IRPF) and VAT provide for different requirements and applicable percentages, for example, 30% VAT for vehicles considered as mixed use, unless greater use is demonstrated.

In case the self-employed person has more than 1 car, it is recommended to register one of them for the performance of the activity, which will affect a higher percentage for writing off costs as expenses.

 

2. Use records and supporting documents.

There are several ways a self-employed person can prove that a vehicle is used for business:

* Trip book: a document that records trips made, indicating the date, reason, destination and mileage. This record is useful evidence of professional use.

* Invoices and supporting documents: expenses such as fuel, maintenance, insurance or tolls, always associated with business trips, support the use of the vehicle.

* Professional agenda: correspondence between meetings, customer visits and trips helps improve the consistency of usage records.

 

3. Technological tools

Using GPS devices or special mobile applications to monitor vehicle usage can be an effective tool. These systems allow trips to be automatically recorded and classified as personal or professional.

 

4. Additional Tests

For vehicles used exclusively in the activity, it may be useful to provide:

* Advertising on the vehicle: A sign with the business name or logo that reinforces the connection between the vehicle and the activity.

* Storage away from home: Storing the vehicle in a location associated with its activity (e.g., in an industrial warehouse) demonstrates its exceptional performance.

 

Conclusion

Demonstrating professional use of a vehicle requires careful and ongoing documentation. A competent approach allows the self-employed to deduct legal expenses as much as possible, thereby optimizing their tax burden.

 

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