Expenses to be included in the VAT taxable base


Binding tax ruling V0663-17, issued by the Spanish General Tax Sub-directorate from March 15, 2017.

The consultant is an entity dedicated to the transport by road of passengers, in whose sector it is common practice that the customer is responsible for the accommodation and maintenance of the driver, so that customers transfer a sum of money to the transport company to be handed over to the driver and this face such costs.

The consultant (Transport Company) wants to know if these amounts for accommodation and maintenance are part of the VAT taxable base of these transport services.

In this sense, it should be mentioned that article 78.One of the Spanish VAT Law, provides that: “the VAT tax base shall be made up of the total amount of the consideration of the transactions that are subject to the same from both the recipient and third parties”.

In particular, are included in the concept of consideration “costs of commissions, shipping and transportation, insurance, premiums of anticipated benefits and any cash credit in favour of who makes the supply of goods or renders the service, derived from the main provision or the accessories thereto”.

Therefore, according to what is mentioned in article 78 of the Spanish VAT Law, expenses incurred by the Transport Company in the provision of services to its client consisting in the accommodation and maintenance of bus drivers, whose amount, documented on invoices addressed to the Transport Company, are charged to customers under agreed conditions for the transportation services, they are included in the VAT taxable base, and THE Transport Company must charge the corresponding VAT quota for these services at the general VAT rate of 21 percent.

However, could be the possibility that these expenses for accommodation and maintenance of the bus driver are considered as an expense paid on behalf of the client, then, they would not be included in the VAT taxable base of the transportation services if all of the following conditions concur:

1st They must be sums paid in the name and on behalf of the client. The Bill should be addressed to the client but not to the Transport Company.

2nd The payment of the sums referred must be done under mandate, verbal or written, of the client on whose behalf the Transport Company would acts.

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CV 0663 17

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