It’s one of the most frequent questions, and the answer tends to disappoint: for income tax (IRPF), most self-employed workers can’t deduct anything for the car; for VAT, half. They are two taxes with different rules, and it’s worth handling them separately.
Income tax: all or nothing
For IRPF, the car and all its related costs (fuel, insurance, repairs, depreciation, financing interest, parking, tolls) are only deductible if the vehicle is used exclusively for the business. If you also use it for anything personal, even a weekend trip to the shops, it stops qualifying and none of those costs are deductible.
There’s no partial percentage here like there is for your home when you work remotely. It’s all or nothing: either the car is for work only, or for income tax it counts as zero.
The exceptions where business use is presumed
The rules allow occasional personal use (and keep the deduction) only in a closed list of activities:
- Mixed-use vehicles for transporting goods.
- Passenger transport for a fee (taxi, ride-hailing).
- Driving instruction (driving schools).
- Travel by commercial agents or sales representatives.
- Vehicles used for rental.
If your activity is on that list, you deduct the car and its costs normally. If not, for income tax you start from zero.
VAT: 50% with barely any argument
VAT works differently. The law presumes that a vehicle used in the business is 50% business-use, so you can deduct half of the input VAT: on the purchase (or on the lease or long-term rental payments) and also on fuel, repairs and tolls.
You can deduct more than 50% if you can prove greater business use, and Hacienda can reduce it if it proves otherwise. In practice, 50% is the figure that holds up without having to justify anything. The same activities from the list above carry a 100% presumption, and for VAT the list also adds security vehicles and those a manufacturer uses for tests or demonstrations.
In every case you need a complete invoice in your name and the vehicle registered as used for the business.
How business use is proven
To defend exclusive business use for income tax, or a percentage above 50% for VAT, it helps to have the vehicle sign-written, an insurance policy that declares professional use, a separate car for private use, and a log of visits or mileage. None of this guarantees the deduction, but it counts if Hacienda asks.
A worked example
Car worth €20,000 + VAT (€4,200) = €24,200, with €1,200 + VAT (€252) in fuel per year.
| Activity outside the exceptions list (mixed use, the most common case) | Activity on the list (taxi, sales rep…) | |
|---|---|---|
| Income-tax deduction on the purchase | €0 — not exclusively business-use | Full depreciation under the tables |
| Income-tax deduction on annual fuel | €0 | €1,200 in full |
| Deductible VAT on the purchase | €2,100 (50% of €4,200) | €4,200 (100%) |
| Deductible VAT on annual fuel | €126 (50% of €252) | €252 (100%) |
For most self-employed workers, the entire saving from “buying a car to write it off” comes down to that €2,100 of VAT on the purchase and 50% of the VAT on fuel: nothing on income tax. If your activity is on the exceptions list, the calculation changes completely.
Before buying a car “to write it off”
Run the real numbers: for most self-employed workers the saving is limited to 50% of the VAT on the purchase and on maintenance, not the whole car. If your activity fits one of the exceptions, it’s a different story. If you want to see the rest of the expenses you can deduct without so many caveats, it’s all in what expenses you can deduct as self-employed. And if the car will belong to a limited company (SL) rather than to you as a sole trader, the rules are different: we cover that in a car for your company (SL): buy, long-term rental or leasing.
Questions about your specific case?
Email us, no strings attached, at contacto@asesoriamadal.es and we’ll review it together.