The High Court of Justice of Andalucía, in its Ruling of May 30th, 2022, appeal number 375/2020, considers non-proportional and neither reasonable the position of the Tax Administration, whose argument was based on indicating that the vehicles were not exclusively used for the business activity. In consequence, the referred High Court of Justice considers that the fees paid for renting were not considered deductible for Corporate Income Tax (hereinafter, “CIT”) purposes.
Specifically, the Court establishes that this criterion is the result of transferring and applying in the scope of CIT a rule initially set-up for the purposes of Personal Income Tax (hereinafter, “PIT”). In such a way, it is relevant to express that the regulations governing CIT do not establish as a condition for the deductibility of these expenses, the exclusive use of the fixed assets.
Thus, the High Court of Justice of Andalucía concludes that the decision of the Administration to deny the deductibility of the expense lacks a legal basis or motivation. Instead, the Court proposes to consider at least 50% of the aforementioned expenses to be allocated or directly related with the business activity, on the basis of a criteria that is also applied in Value Added Tax (hereinafter, “VAT”), because, additionally, this is what emerges from the evidence provided by the taxpayer in the specific case that is been treated in the current analysis.
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