An SL can deduct any expense that is necessary for generating company income and backed by the right documentation. The legal standard is Article 10 of Ley 27/2014 (the Corporate Income Tax Law, LIS): expenses must be correlative with company income and properly recorded in the accounts. Last verified: May 2026.
This guide covers the main expense categories, the three tiers of acceptable proof, common misunderstandings, and what Hacienda looks for in an audit.
Under Article 10 of Ley 27/2014 (LIS), corporate tax is calculated on accounting profit with adjustments. An expense is deductible when:
Expenses that fail any of these three tests are added back to the taxable base during an audit.
The minimum proof required depends on the category:
Best practice: request a full invoice for any expense over €50 and file it indexed against the accounting entry. This protects both the IS deduction and the VAT reclaim.
Salaries, bonuses, and social security contributions for employees are fully deductible. The autónomo societario cuota paid for the director who works in the company is also deductible as a staff cost.
Proof required: payslips, bank receipt for social security payments, and the monthly payroll summary.
Director salary: deductible only if the director holds a genuine employment contract or alta dirección contract, and the remuneration reflects the services provided at arm's length. Statutory directors receiving fees purely for the director role are subject to different rules. Structure this correctly from the start.
Rented office space and coworking are fully deductible.
Home office: if the registered office is a private residence, a proportional share of rent and utilities is deductible based on the percentage of floor area used exclusively for the business. There is no fixed formula in the LIS; the standard approach is to divide the dedicated work area by the total floor area. Keep a floor plan and written justification on file.
A company-owned vehicle used exclusively for business is 100% deductible for IS purposes (depreciation, insurance, fuel, maintenance) and full input VAT is recoverable on purchase.
Mixed-use vehicles are a high-audit-risk area. AEAT's default position is 50% business use unless trip logs demonstrate otherwise. Deduct proportionally and keep records.
Required proof for all vehicle costs: receipts or invoices under the company name, plus trip logs showing date, destination, business purpose, and km.
Business travel (flights, trains, hotels) is fully deductible when there is evidence of the business purpose.
Business meals are fully deductible for IS purposes when the meal is for a genuine business purpose, paid by card, and supported by documentation of the business context.
Important: the 50% cap on meals is an IRPF rule that applies to autónomos. SLs under the LIS can deduct 100% of documented business meals. AEAT does scrutinize meals heavily; keep notes of who attended and why.
Business software, SaaS tools, and professional online subscriptions are deductible.
Accountancy, legal fees, consultancy, and outsourced services are deductible.
Course fees, conference registrations, and training materials are deductible when directly linked to the company's activity.
Business insurance (liability, property, professional indemnity) is deductible when the policy is under the company name and relates to the business activity.
Health insurance is deductible only when the policy exists for a genuine company purpose, such as a condition of a business loan or as a contracted employee benefit. A health policy taken out for the director's personal benefit alone is not deductible.
Bank fees, payment processing charges, and loan interest are deductible.
Any expense that touches the business is deductible. The expense must be necessary for generating income and properly documented. AEAT distinguishes between expenses useful to the director personally and expenses necessary for the company.
A bank statement is enough for everything. Bank statements prove payment but not business purpose. For meals, travel, and meetings, you also need documentation of the business context.
Mixed-use vehicles can be deducted at 100%. Only with evidence of exclusive business use. Without trip logs, AEAT defaults to 50%.
Meals are capped at 50%. The 50% cap is an IRPF rule for autónomos. SLs under IS can deduct 100% of properly documented business meals.
Cash payments are fine as long as I have a receipt. Payments over €1,000 in cash between business parties are prohibited under Ley 7/2012. Cash payments also cannot be used for input VAT reclaim.
Tax audits for SLs typically focus on:
Maintaining indexed documentation makes an audit straightforward. Unindexed or missing invoices result in back-additions and surcharges.
Can an SL deduct the director's salary?
Yes, if the director has a genuine employment or alta dirección contract and the remuneration reflects the services provided. Purely statutory director fees without an employment contract require a specific structure to be deductible. Get advice upfront.
Is the autónomo societario cuota deductible?
Yes. Social security contributions paid for the director who works in the company are a deductible staff cost. Proof: bank receipt of the monthly payment.
Can I reclaim VAT on all deductible expenses?
Only with a full Tier 3 invoice (company name, NIF, and address). A receipt with the company name alone supports the IS deduction but not input VAT recovery.
Are fixed assets deductible in the year of purchase?
Not in full. Fixed assets are depreciated over their useful life at AEAT-approved rates under RD 634/2015. The annual amortization amount reduces the taxable base each year.
How much does a deduction actually save?
It depends on your IS rate. Under the 2026 Ley 7/2024 rates: 19% for the first €50,000 of taxable base for micro-enterprises (turnover under €1M), 23% for SMEs (€1M to €10M). Every €1,000 of deductible expense saves €190 to €230 in corporate tax, before dividend tax on what remains.
The documentation habit is the most important accounting practice for an SL. Keeping a Tier 3 invoice for every material expense means you can defend every deduction, recover input VAT, and pass an audit without surprises.
For accounting setup, quarterly IS provisions, and deduction review, see renn's SL service or book a tax chat to go through your specific expense mix.
