As a self-employed working from home, you can deduct certain expenses related to your home, which we will list below.
However, these expenses are not 100% deductible. Instead, you can deduct 30% of the percentage of your home that has been reported to the tax authorities using form 036, and they are only deductible for income tax purposes, not VAT.
- Utility bills (electricity, gas, water, internet)
They are deductible if the invoice is under your name. You can include the expense as a deduction from the amount paid.
Let’s see an example:
I have an internet bill amounting to 20.00 + VAT = EUR 24.20
In my form 036, I have reported that 10% of my internet expenses correspond to my activity, so we can deduct the following:
20.00 x 10% = 2.00 * 30% = EUR 0.60 deductible base and EUR 0.13 non deductible VAT.
How to justify them?
They must always be in your name, as well as the rental contract or mortgage of the property from which you carry out your activity.
What document should you include as an expense? The complete invoice from the utility company under your name.
- Rent (house/flat)
The deduction of rental expenses is a controversial issue, as they cannot always be deducted.
At Xolo, we treat each case individually: the first thing we do is to review the contract to see if there is any clause in it that specifically indicates that we can or cannot carry out an economic activity in the dwelling.
If it is deductible, this property must be indicated on form 036, in the same way as other utilities, and will be deducted in the same manner (30% of the applicable percentage). It will also be taken into account whether you are the only person named on the rental agreement or whether you share the rent with other people.
If the rental contract contains a clause that doesn't allow you to include the rent as a business expense, you will need to talk to your landlord to draw up an addendum signed by both parties that allows you to include it.
What document should you include as an expense? The transfer receipt showing both your name and the landlord's name, the month and the amount.
- Mortgage
As a self-employed, if you own a property on which you are paying a mortgage, you can also include the expense, but you can only deduct the interest applied to the mortgage, and it is deducted in the same way as in the previous cases.
Whether or not you are the sole owner will also be taken into account.
What document should you include as an expense? The receipt for the mortgage payment showing your name, the total amount and the interest.