All expenses in equipment that the self-employed can deduct both in VAT and in personal income tax

The self-employed have the right to deduct all the equipment they need in their businesses whenever they are necessary to carry out their activity. In fact, several experts agreed that the deduction of these expenses usually represents the highest amount in total deductions for most self-employed workers. These are essential materials or products for your work, so it is not easy to specify an exact list of what is or is not deductible in this area, since it depends entirely on the business that the self-employed person has. However, an expense included in this category that is common in many professionals is the computer, which, although it is always an easy deductible expense, some claim to have had problems with the Treasury when deducting it due to the brand of the laptop: As a self-employed worker at the head of a consultancy says, "I bought an Apple-brand computer and I couldn't deduct it, but another colleague who bought an HP could."

Nevertheless, both the general secretary of the Union of Inspectors and Treasury Technicians (Gestha), José María Mollinedo, as well as other expert lawyers in deductions consulted assured that "neither the VAT Law nor the Personal Income Tax Law includes institutional issues, orders of service or recommendations to officials that refer to the brands of products that the self-employed may or may not deduct. The only problem that can arise when deducting a computer is "that the Administration doubts whether the use is exclusive for economic activity or, on the contrary, the professional also gives it a personal use", Luis explained for his part. del Amo, technical secretary of the Registry of Fiscal Advisory Economists (REAF) of the General Council of Economists (CGE).

What is clear is that the Law specifies that only expenses that are directly related to the activity of the self-employed are deductible. Thus, article 95 of the VAT Law establishes in its point one that "entrepreneurs or professionals may not deduct the fees paid or paid for the acquisitions or imports of goods or services that do not affect, directly and exclusively, their business activity or profession". But if we talk about the deduction of expenses for equipping a business, the Treasury does not usually present any problem to the self-employed, the only important thing to take into account here is the activity that is carried out and, from there, knowing what expenses are directly and exclusively related to the activity carried out by the self-employed worker and can be justified as such.

Deduction of materials and goods for the business

Purchase of a computer or computer material

Neither the acquisition of a computer, nor therefore its deduction is exclusive of activities such as commercial , insurance agents, advisors or managers, as one might think. In fact, practically any self-employed person can deduct the cost of buying a computer and its peripherals, or what is the same, computer equipment. As of today, the experts assured that it could be justified as necessary for all types of activities, since all self-employed workers need to make their brand or that of their business visible through the Internet; keep your accounts; issue invoices or keep an eye on email.

In addition, this deduction is included in both the Value Added Tax (VAT) and Personal Income Tax (IRPF) declarations. In the case of VAT, the self-employed person would include it as a deduction in boxes 30 and 31 of the quarterly declaration. Of course, like other purchases, it will be necessary to justify by means of any evidence admitted by law that the computer is directly related to the activity, and it is going to be used only for the business. A question that is not difficult to prove in the majority of activities that they use the computer for almost any aspect of accounting, customer relations, product development and even to provide their services. If so, the professional may deduct 21% of the amount paid when purchasing the computer.

In personal income tax, usually, the deduction will be made by amortization. The most common thing is to pay it off in next year's INCOME campaign, which will start around the month of May. It should be remembered that the Treasury establishes that the amortization of a computer must be made at 26%. Therefore, in the annual declaration, in the event that, for example, 749 euros were spent on the purchase of the laptop, it may include 194.7 euros as annual amortization.

However, some freelancers claim that the Treasury denied this deduction for the brand of the computer

Despite these testimonies from freelancers who assured that the Treasury did not allow them to deduct the expense for the purchase of a computer for carry out their activity for the brand in question, the experts insisted that "there is no institutional issue or service order that refers to the denial of a deduction for the brand of the products," explained the secretary General of Gestha. "In this case, the only point where there is a diffuse border is the suspicion on the part of the Administration that this material is used exclusively for economic activity, or is shared with the use in the personal life of the self-employed worker", added.

Be careful, the Treasury only accepts deductions if the purchase is necessary for the activity and with an invoice

The deductible materials and products depend to a large extent on the type of economic activity that is carried out, hence the examples of deductible materials can range from a table to a hair dryer. But the Treasury keeps an eye on whether that equipment or product is necessary for the activity. In this way, and by way of example, for the owner of a bar, the purchase of food products would be perfectly justified. Not so for a freelancer who is dedicated to transport, or fashion. On the other hand, a self-employed person in charge of a travel agency -like almost any business- may deduct office supplies such as notebooks, pens or folders, but the Treasury would not accept the expense of a cold room.

There have been cases of self-employed people who have wanted to deduct the purchase of jewelry, clothing, non-office furniture, sports equipment, and even swimming pools.

The only thing that the self-employed must take into account to be able to deduct these expenses is that they are necessary for the activity and submit an invoice for each and every one of them to the Treasury. It is a frequent mistake on the part of professionals who want to deduct expenses "such as material in a stationery store or cleaning products in a drugstore, that their only justification is the ticket issued by the business where they have purchased it. This is not allowed in any case because they do not contain the data of the company that sells or the self-employed person who buys," said the general secretary of Gestha. "They always need an invoice," said José María Mollinedo.

In addition, the expert added, it is very common for the self-employed to deduct expenses "having only a delivery note, for example, to justify the purchase. This is not valid in the eyes of the Treasury, nor is a receipt."