How do company expenses work in Spain?
Find out how business expenses work in Spain - if you have the right to claim them, what you can claim expenses on and what the tax implications are.
Company expenses, known as dietas in Spanish, are compensation for any bills you have to pay for doing work outside of the conventional workplace. This means that they are extra payments, not part of your salary or remuneration for work performed.
For example, this could be money for a train ticket if you need to attend a meeting in another city or the cost of a hotel if you need to travel further and stay for several days.
Do I have the right to claim company expenses in Spain?
Article 40 of the Workers' Statute states that companies have the obligation to compensate for temporary displacements with allowances. It says: “For economic, technical, organisational or production reasons, or for hiring related to business activity, the company may carry out temporary transfers of its workers that require them to reside in a town other than that of their habitual residence, paying, in addition to the salaries, travel expenses and subsistence allowances”.
Despite this, company expenses are not an automatic right for all workers in Spain. You will usually only be able to claim them if this was a prior agreement between you and your company. This will typically be what’s known as your company’s Collective Agreement.
If the Collective Agreement states that you will be able to claim expenses, it should specify exactly when, in which situations, and how much these will be.
READ ALSO: Why you have the right to find out the salary before a job interview in Spain
What if my company doesn’t have an agreement on expenses?
In the event that your company does not have a Collective Agreement on company expenses and it is not part of the contract, it doesn’t necessarily mean that you can’t claim them for certain situations.
As seen in the Workers' Statute above, companies do have the obligation to compensate you if you have to pay out of pocket.
If you are sent to another city for a few days for a conference, for example, it doesn’t mean that you have pay for the hotel yourself, it just means that the payment is made in a different way.
Perhaps you will have to pay for the hotel initially and then your company will refund the money or the administrative department will simply buy the tickets and reserve the hotel for you and pay for them directly.
In this last case, you will not actually receive the money, but you will still benefit from staying in the hotel.
READ ALSO - Q&A: How Spain's left wants to slash working hours without cutting pay
What can I claim company expenses on?
We’ve already mentioned a couple of examples such as hotels and travel tickets, but there are in fact three main categories of expenses you may be able to claim.
Transport
If you have to travel for work reasons, your company should cover the transportation costs. This includes not only transport tickets but also, fuel, taxi bills and any vehicle maintenance.
Each company, according to its Collective Agreement, will pay a certain amount per kilometre. In any case, a maximum amount of €0.19 per kilometre will be exempt from taxation. Anything that exceeds that amount will be subject to personal income tax.
You may also be able to get extra payments for paying tolls, paying for stays in private car parks or traffic fines, even though these may not initially be part of the agreement.
Accommodation
These include hotel expenses when you have to work away from home. The type of hotel you stay in and the cost per night should be mentioned in the Collective Agreement and will depend entirely on your company.
Food
Whether you just have to leave the office for a day or you’re staying for three days in another city, you will typically not have access to a kitchen, so your work should be paying for your meals while away.
Companies will usually have a daily budget for food expenses. They may include these for you at the hotel or you may have to send them the receipts and they will reimburse you.
Internet, electricity and other remote work expenses
Spain introduced a new Remote Work Law as a result of the consequences the pandemic had on working habits in the country, meaning that internet, electricity and any other equipment needed by the employee to carry out their work remotely must be paid either in full or in part by the company, as part of a collective union agreement or a direct deal between the employer and the employee.
What are the tax implications of company expenses?
Technically any extra expenses should be included on your payroll, but added in the accruals section, not as part of the salary.
If you receive expense payments from your company, rather than them paying your expenses for you, it may have tax implications, so be careful.
As long as expenses for accommodation and food do not exceed €53.34 within Spain or €91.35 abroad, you will be exempt from paying personal income tax on them and will not have to include them in your income tax return.
The same happens if they do not exceed €26.67 in Spain in the case of expenses without overnight stays or €48.08 abroad.
You must also demonstrate that the trips are to a different municipality than your usual place of work and that they do not last more than 9 months continuously.
If there are any discrepancies between what is mentioned on the accruals and your bank statements, the Treasury will try to verify it by looking into your personal income tax.
As the amounts for the hotels, in particular, are not high, especially considering the prices of accommodation in some of Spain’s biggest cities, the best option is for your company to pay the hotel directly or to put it on a company card instead of giving you the money for it.
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Company expenses, known as dietas in Spanish, are compensation for any bills you have to pay for doing work outside of the conventional workplace. This means that they are extra payments, not part of your salary or remuneration for work performed.
For example, this could be money for a train ticket if you need to attend a meeting in another city or the cost of a hotel if you need to travel further and stay for several days.
Do I have the right to claim company expenses in Spain?
Article 40 of the Workers' Statute states that companies have the obligation to compensate for temporary displacements with allowances. It says: “For economic, technical, organisational or production reasons, or for hiring related to business activity, the company may carry out temporary transfers of its workers that require them to reside in a town other than that of their habitual residence, paying, in addition to the salaries, travel expenses and subsistence allowances”.
Despite this, company expenses are not an automatic right for all workers in Spain. You will usually only be able to claim them if this was a prior agreement between you and your company. This will typically be what’s known as your company’s Collective Agreement.
If the Collective Agreement states that you will be able to claim expenses, it should specify exactly when, in which situations, and how much these will be.
READ ALSO: Why you have the right to find out the salary before a job interview in Spain
What if my company doesn’t have an agreement on expenses?
In the event that your company does not have a Collective Agreement on company expenses and it is not part of the contract, it doesn’t necessarily mean that you can’t claim them for certain situations.
As seen in the Workers' Statute above, companies do have the obligation to compensate you if you have to pay out of pocket.
If you are sent to another city for a few days for a conference, for example, it doesn’t mean that you have pay for the hotel yourself, it just means that the payment is made in a different way.
Perhaps you will have to pay for the hotel initially and then your company will refund the money or the administrative department will simply buy the tickets and reserve the hotel for you and pay for them directly.
In this last case, you will not actually receive the money, but you will still benefit from staying in the hotel.
READ ALSO - Q&A: How Spain's left wants to slash working hours without cutting pay
What can I claim company expenses on?
We’ve already mentioned a couple of examples such as hotels and travel tickets, but there are in fact three main categories of expenses you may be able to claim.
Transport
If you have to travel for work reasons, your company should cover the transportation costs. This includes not only transport tickets but also, fuel, taxi bills and any vehicle maintenance.
Each company, according to its Collective Agreement, will pay a certain amount per kilometre. In any case, a maximum amount of €0.19 per kilometre will be exempt from taxation. Anything that exceeds that amount will be subject to personal income tax.
You may also be able to get extra payments for paying tolls, paying for stays in private car parks or traffic fines, even though these may not initially be part of the agreement.
Accommodation
These include hotel expenses when you have to work away from home. The type of hotel you stay in and the cost per night should be mentioned in the Collective Agreement and will depend entirely on your company.
Food
Whether you just have to leave the office for a day or you’re staying for three days in another city, you will typically not have access to a kitchen, so your work should be paying for your meals while away.
Companies will usually have a daily budget for food expenses. They may include these for you at the hotel or you may have to send them the receipts and they will reimburse you.
Internet, electricity and other remote work expenses
Spain introduced a new Remote Work Law as a result of the consequences the pandemic had on working habits in the country, meaning that internet, electricity and any other equipment needed by the employee to carry out their work remotely must be paid either in full or in part by the company, as part of a collective union agreement or a direct deal between the employer and the employee.
What are the tax implications of company expenses?
Technically any extra expenses should be included on your payroll, but added in the accruals section, not as part of the salary.
If you receive expense payments from your company, rather than them paying your expenses for you, it may have tax implications, so be careful.
As long as expenses for accommodation and food do not exceed €53.34 within Spain or €91.35 abroad, you will be exempt from paying personal income tax on them and will not have to include them in your income tax return.
The same happens if they do not exceed €26.67 in Spain in the case of expenses without overnight stays or €48.08 abroad.
You must also demonstrate that the trips are to a different municipality than your usual place of work and that they do not last more than 9 months continuously.
If there are any discrepancies between what is mentioned on the accruals and your bank statements, the Treasury will try to verify it by looking into your personal income tax.
As the amounts for the hotels, in particular, are not high, especially considering the prices of accommodation in some of Spain’s biggest cities, the best option is for your company to pay the hotel directly or to put it on a company card instead of giving you the money for it.
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