One of the most common questions asked by freelancers on forums in Spain is exactly what you are allowed to deduct as expenses, and what you are not.
Often people are afraid to deduct expenses for fear they’ll get audited and fined, if the expenses are not deemed appropriate or if they’re not used exclusively for your business.
So what exactly is considered a reasonable expense if you work from home and what is not?
Keep in mind this article we are specifically looking at the scenario for those who are self-employed and registered as autónomo. If you’re employed and a remote worker, you are much more limited on what you can offset against tax and it’s not the same situation.
Bills
If you have a specific office or dedicated workspace in your home which is only used for this purpose, you can deduct the cost of utilities and other bills.
This is the case for electricity, gas, water, internet and in some cases, phone bills.
For these utilities you can apply a 30 percent deduction.
For example, if you work in a 20-square metre office space and your home is 100 square metres, you can deduct six percent of your bills.
In reality it only ends up being a few Euros, but it all adds up and can help.
Remember, everything you deduct but be able to be related to your professional activity.
READ ALSO: How to hire someone if you’re self-employed in Spain
Rent
If you rent your property, you may also be able to deduct part of your rental costs.
If you have a dedicated office of 20 square metres in a 100 square metre apartment, you could deduct 20 percent for example.
Sounds good, right? Here comes the tricky part though. In order to be legal in this case your landlord will have to issue you with two rental contracts: one for the main residence and another for your work space.
To do this, the landlord will have to register as a professional, issue a VAT invoice for the place where you work and comply with their tax obligations.
Not all landlords will be so willing to make separate contracts so you’ll have to find one that is as it could make a significant saving.
READ ALSO: Do I have to register as self-employed in Spain and pay tax if I earn below minimum wage?
Mortgage and community fees
If you own your own property, you may be able to deduct expenses for your home office too.
This includes the proportional part of the mortgage interest paid that corresponds to the space used as your office.
Community and maintenance fees are also deductible in proportion to the professional use of the property. Expenses for improvements and repairs to your home office are deductible too.
According to Info Autónomos website, a proportion of you home insurance can also be deducted, although some gestores don’t agree with this so check with your gestor first to see what they say.
READ ALSO: What to do if you’re facing a tax inspection in Spain
Office supplies and business expenses
If you work from home and have your own office, it’s likely that you will need some type of supplies and have expenses to keep your business running.
This could include printing paper and ink, binders, pens, software for your computer, a domain and web hosting for your website.
Check with your gestor as to what other home office expenses can be deducted. It will depend on what type of business you run, so it will be different for everyone.
READ ALSO: What’s the difference between a gestor, a lawyer and a notary in Spain?
Training and subscriptions
If you need to do any training to improve your professional skills, these can also be deducted. This could include workshops, seminars, conferences etc.
It may also include subscriptions to websites or magazines that you need to keep your skill level up and in the know.
What else you need to know
Remember, in order to offset anything against tax and record them as business expenses you will need a proper invoice showing your name, address and NIE/DNI etc.
You will also need to keep all of them in a folder and be highly organised. It’s a good idea to scan them in or take a photo of them as paper receipts and invoices can deteriorate easily.
If you are audited at any time in the future, you will need to show all of these receipts and invoices and be able to justify each expense.
Of course there are many other expenses you can offset including your gestor fees, social security etc, which are not related to your home office. We talk about many of these in this article here.
If in doubt about anything, it’s best to find out from your gestor exactly what counts as reasonable expense and what doesn’t.
Our journalists at The Local are not tax experts, it’s important to always contact a professional when it comes to taxes and financial advice.
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