Income tax and deductible expense

The basic principles that the deductible expenses must comply with in the IRPF and for an economic activity.

In the calculation of the net income of the economic activities whose system of determination is the direct estimate, there is a generic reference to the rules of Corporation Tax, which leads us to the determination of the taxable base by correcting, through the application of the provisions established by the Law of Corporations, the accounting result determined in accordance with the rules set forth in the Commercial Code.

According to this reference, the deductibility of expenses is conditioned by the principle of correlation with income, and it must therefore be demonstrated that they have been incurred in the course of the activity and that they are necessary to obtain the income. So when there is no such linkage to the activity or need for it, they could not be considered deductible.

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VAT or ITP on the purchase of a home

Concept of first delivery of dwellings (new dwellings)

The'first supply' of dwellings is understood to be that which is purchased from the developer when the construction or refurbishment is completed, unless the dwellings have been used continuously for a period of two years or more by persons other than the purchasers.

That is to say, if the developer, once the works have been completed, rents the dwellings and after two years puts them up for sale, if the dwellings are purchased by the tenants themselves, the delivery of the dwellings is a'first instalment', but not if the dwellings are purchased by different persons.

The construction of a dwelling is considered to be completed when a certificate of completion is issued by the architect and quantity surveyor who directed the work ...

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Tax return 2018: How do I calculate the capital gain or loss from the sale of a home?

A change in the assets of a natural person may result in the need to include increases or decreases in assets in the tax return.

Gain or loss of assets.

According to personal income tax regulations, the alteration of an individual's assets can lead to a gain or loss of assets.

In the case of the sale of a home, the capital gain or loss is the difference between the transfer value of the home and the acquisition value, understood:

Acquisition value: value for which the property was acquired plus the expenses inherent in the acquisition, such as commissions, public deed, registration, etc.; and taxes inherent in the acquisition (Transfer Tax and Documented Legal Acts, VAT or Inheritance or Gift Tax if the acquisition is made by inheritance or donation) ...

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