These are the personal income tax deductible expenses in 2024

Personal income tax deductible expenses in 2024

Summary

  • Deducting expenses related to the activity carried out is a way to obtain tax savings
  • You must know the Law on Personal Income Tax and its implementing regulations.

 

Every person who is registered in the special self-employed regime must know what the deductible expenses are; carrying out a self-employed activity implies assuming a series of expenses and periodically paying a series of taxes.

Deducting expenses related to the activity carried out is a way to obtain tax savings. To do this, you have to know the Law on Personal Income Tax (IRPF) as well as its development regulations.

Requirements for an expense to be deductible

  • That the taxpayer is registered in the Special Regime for Self-Employed Workers (RETA) of Social Security and the Treasury.
  • That it has adopted the direct estimation regime (normal or simplified).
  • That the expenses are linked to the economic activity carried out by the person (“affects the self-employed”).
  • That they are expenses justified with the corresponding invoices, whether they are receipts containing all the required tax data or invoices broken down as usual. They must identify who made the expense and specify the operation in detail.
  • That these expenses are accounted for by the self-employed worker in their accounting books, expenses and investments.

On some occasions, the criteria of being linked to the activity may give rise to some particularities, since these professionals must justify and demonstrate that they correspond to their ordinary activity and are linked to it and not to their private life, as may happen with housing in the case of teleworking or devices that can be used for both areas (a mobile phone, a computer, etc.).

The most common expenses

In this way, the most common expenses that every self-employed person should consider in order to deduct them in personal income tax are:

  1. Operating expenses. Also called operating expenses, such as the acquisition of materials, fuels and other resources necessary for the operation of the company. They are calculated by adding the beginning stocks and purchases and subtracting the ending stocks.
  2. Remunerations and compensations. These are payments to employees, including salaries, bonuses, reimbursements for travel expenses, among others.
  3. Self-employed contribution contribution. The fee corresponding to the exercise of the professional activity is vital to keep it going and, therefore, it is also a deductible expense.
  4. Additional personnel costs. Training, compensation for termination of contracts, insurance, business gifts and contributions to retirement plans.
  5. Rentals and periodic payments. Those that are carried out by the use or granting of rights over certain assets for a certain time, such as technical assistance, licenses software or payments related to financial leasing contracts (leasing).
  6. Home maintenance for the company. Compensation for household supplies left for work in a 30 %. This type of expense is deductible only in the aforementioned percentage and applies to those self-employed workers who telework from home and have notified the Treasury in their census declaration (form 037 or 036).
  7. Repair and conservation services. Investments to maintain assets in optimal conditions, excluding significant improvements. Investments amortized over several years are not included in this case.
  8. Independent professional fees. Payments to external experts such as accountants, lawyers or consultants.
  9. Food expenses during the activity. They are deductions with specific criteria for living expenses. In some cases, the worker may deduct about 26 or 53 euros per day when he or she spends the night in Spain or abroad, respectively.
  10. Other external services. Research, transportation, advertising, among other services necessary for the operation of the business that are not included in those mentioned above.
  11. Tax deductible tax charges. The Real Estate Tax (IBI), the Economic Activities Tax (IAE) and other taxes and other levies permitted by law.
  12. VAT refund. Only applicable when it is not possible to recover it through the quarterly declaration.
  13. Financial expenses. Interest, surcharges for deferred payments and other costs associated with loans and credits.
  14. Asset depreciation or amortization. Assessment of the loss in value of the company's assets over time.
  15. Expenses that are difficult to justify. Deduction from the 7 % of expenses that are difficult to justify from the previous net income with a limit of 2,000 euros.

In any case, in addition to the expenses already mentioned, it is possible that others may arise to take into account that are not so specific or that present difficult justification. For this reason, it is crucial to be able to consult with a manager who can dedicate himself completely to studying in each case whether the deduction is applicable or relevant or none of the above is possible.

Regulations and practical manuals

6 Responses

  1. I have doubts about the percentage of expenses that are difficult to justify that we must deduct in a simplified direct estimate in the payment on account of personal income tax of form 130 to be paid now in April 2024, during 2023 it rose from 5% to 7% but I do not know if this is maintained percentage in this year's payment on account or if it is 5% again

    1. Good afternoon:
      Thank you very much for your interest in Madrid Emprende and for your comments.
      For this type of queries, in Madrid Emprende We offer you a set of free advisory services for entrepreneurial people, which we offer with the aim of supporting and resolving all the doubts that arise from the moment you consider the business idea. You can consult about advice at the Entrepreneur's Single Window or in the network of business incubators from the following link: https://www.madridemprende.es/asesoramiento/#VUE, from that same place you can request an appointment, in person or online, for advice.
      Make an appointment with the Entrepreneur's Single Window.
      Request for telematic advice at the Entrepreneur's Single Window

  2. Forms 030 and 037 are similar. I registered with the tax agency with form 030. Should I repeat what I did with form 037?

    1. Good afternoon:
      Thank you very much for your interest and for your comments.
      At Madrid Emprende we offer you a set of free counseling services For entrepreneurs in the Entrepreneur's Single Window or in the network of business incubators, you can access from the following link: https://www.madridemprende.es/asesoramiento/#VUE, from that same place you can request an appointment, in person or online, for advice.
      Make an appointment with the Entrepreneur's Single Window.
      Request for telematic advice at the Entrepreneur's Single Window
      Greetings.

  3. Good morning.
    I am a self-employed archaeologist. I have hired the services of a machinist with his corresponding excavator machine for some field work. Where would this invoice be deductible, in fees to professionals, external services,...?
    All the best

    1. Good afternoon:
      Thank you very much for your interest in Madrid Emprende and for your comments.
      For this type of queries, in Madrid Emprende We offer you a set of free advisory services for entrepreneurial people, which we offer with the aim of supporting and resolving all the doubts that arise from the moment you consider the business idea. You can consult about advice at the Entrepreneur's Single Window or in the network of business incubators from the following link: https://www.madridemprende.es/asesoramiento/#VUE, from that same place you can request an appointment, in person or online, for advice.
      Make an appointment with the Entrepreneur's Single Window.
      Request for telematic advice at the Entrepreneur's Single Window

      Greetings.

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