The 4 requirements for submitting a company's deductible expenses

The deductible expenses of a company they represent an economic injection for your company. We tell you what requirements you must meet to present them to the Administration.

According to the Corporate Income Tax Act Deductible expenses are all expenses that are understood to be necessary to carry out the business activity. Therefore, they are those expenses that have to do with the daily activity of your company or with what it does.

In order to deduct expenses, it is very important to always comply with the criteria and requirements set out in the regulations. Here we explain what the essential ones are:

Don't forget the invoice

Any expense must be justified with the corresponding documentary evidence: full invoice, payslips, receipts, public deeds, etc.... Therefore, it is very important to always have a complete original invoice as a supporting document.

Without it, it will not be possible to deduct input VAT, even if the expense is considered deductible for corporate income tax purposes. For further information on this tax, this is a guide to VAT.

Must appear in the profit and loss account

They must be reflected in the profit and loss account for the year. The law allows them to be shown in a reserve account or exempted from recognition only in certain cases, which are expressly provided for, such as the case of assets.

To be charged in the relevant financial year

There are exceptions to this rule, because it is possible to include expenses booked at a date after accrual and income before accrual, as long as the result is not taxed at a lower rate than would have been the case in the regular period.

What happens if we deduct expenses that do not meet the legal requirements?

If these requirements are not met or if the expenses are expressly qualified as non-reducible, there is a risk of penalisation by the administration with fines that can be very high.

Examples of deductible business expenses

Now, get to know these examples of deductible business expenses that you should not forget:

• The travel costs, provided that an expense sheet is provided specifying the reason for travel and that the expenses are broken down into different invoices.
• The hotel and catering expenditure when they are meals related to and necessary for the professional activity, in a location other than that in which the business is carried out and for an appropriate amount. In this regard, you should know what the Ticket Restaurant and all its benefits.
• Vehicles and related costs, only if they are wholly related to the activity and may not be used for any particular purpose.
• The renting premises for carrying out the company's activity is also deductible, as is clothing, as long as it bears the logo or anagram of the business.

In short, all deductible expenses of a company that are deductible because they meet the requirements of accounting, justification and attributability to the fiscal year may be deducted from the tax base. However, with the exception of those listed exhaustively in the regulations.