The Subdirectorate General of Taxes, in response to Binding Consultation V0265-22, dated February 14, 2022, reiterates that it is up to the company to prove, by any means of proof admitted in law, the reality of the trips, when it pays per diems or mileage to its employees.
DESCRIPTION
The consulting entity has acquired a company, subrogating itself in its position as employer, and is now operating certain work centers of said company located in different municipalities of the province of Almería (El Ejido, Roquetas de Mar, Huércal de Almería), which are distant from the municipality where it is located from the head office of the consulting entity (Vera). Certain workers of the consultant, mainly three of them, with management and administration functions of the company, have to make multiple trips to the new work centers acquired by the company, in order to carry out the tasks involved in the integration of these work centers and their workers within the organization of the consultant, such as the revision of the cash registers, month-end closing procedures, brand audits, meetings with the administration and budget analysis, etc.
In short, the recipient of such trips is always the consulting entity, and no third party outside the company (customer, supplier, etc.) is involved in such trips.
The reality of the trips is recorded exclusively in the company's own internal records, which contain the employee's identification data, his or her position in the company, the day and reason for the trip, the place of the trip, kilometers traveled, with the signature of the employee and the manager at the end of each month.
ISSUE
Form of accrediting the reality of the trip when using own vehicle, for the application of the exemption to the allowances for locomotion expenses foreseen by article 9.A.2 of the Personal Income Tax Regulation.
ANSWER
A.2 of the Personal Income Tax Regulations, approved by Royal Decree 439/2007, of March 30 (BOE of March 31), which establishes the following:
"Exempt from taxation are the amounts destined to compensate the locomotion expenses of the employee or worker who travels outside the factory, workshop, office, or work center, to perform his work in a different place, under the following conditions and amounts:
- When the employee or worker uses public transportation, the amount of the expense that is justified by means of an invoice or equivalent document.
- Otherwise, the amount resulting from computing 0.19 euros per kilometer traveled, provided that the reality of the trip is justified, plus the toll and parking expenses that are justified".
In turn, paragraph 5 states that "the amounts exempted from taxation in this article shall be subject to revision by the Minister of Economy and Finance, in the same proportion as the per diem allowances of civil servants are revised", while paragraph 6 states that "the allowances for travel, subsistence and living expenses in excess of the limits provided for in this article shall be subject to taxation".
In order to resolve this consultation, we will start from the premise that the three workers who travel to the new work centers to perform the tasks described in the consultation letter, have their work center in Vera (Almería), where the head office of the consulting entity is located.
The amounts paid for travel, insofar as they constitute compensation for the use of own or public means of transport in order to perform the service assigned to the employee -carried out in the different work centers under consultation, which have been acquired and operated by the consulting entity-, may be included within the allowances for travel expenses that Article 9.A.2. above-mentioned, considers exempt from taxation, since they are intended to compensate the travel expenses of the employee or worker who travels outside his work center to carry out his work in a different place.
However, in order for the tax exemption to be applied, the conditions required in the aforementioned precept must be met, which depends on the case: if public means of transport are used, the amount of the expense must be justified by means of an invoice or equivalent document; or if own means of transport are used, they correspond to the justification of the reality of the trips and, if applicable, of the toll and parking expenses.
In the latter case, use of own vehicle, the amounts allocated for travel shall be exempt from taxation in the part corresponding to the computation of 0.19 euros per kilometer traveled in the trips whose reality is justified, to which the toll and parking expenses shall be added as soon as they are justified.
With respect to the justification of the reality of the displacements, the same may by any of the means of proof admitted in Law, as provided in article 106 of the General Tax Law (Law 58/2003, of December 17, 2003).as provided for in article 106 of the General Tax Law (Law 58/2003, of December 17), although it will be the responsibility of the management and inspection bodies of the Tax Administration to assess it.
In this regard, on November 6, 2018, the Central Economic Administrative Court, TEAC, has resolved extraordinary appeal for the unification of criteria 00/3972/2018, setting the following criteria, regarding the burden of proof of exemption from taxation of remuneration that has been declared by the payer as allowances exempt from taxation, determining whether it corresponds to the payer or the recipient thereof:
1.- There is no regulatory obstacle that prevents the Administration from verifying the recipient of remuneration that has been declared as per diems and allowances for travel expenses exempt from taxation, in relation to the same.
2.- The expenses of locomotion by use of a private vehicle as well as the expenses of maintenance, must be accredited by the payer, since it is up to him to justify the day and place of the displacement that, together with the reason or motive of this, are precisely the extremes that allow to accredit that the amounts (euros per kilometer or euros per day) established in the norm are exempt from taxation because they are due to work reasons and development of his economic activity. This is not an obstacle for the beneficiary to be able to voluntarily provide the justification of the same if he/she has it.
3.- Travel expenses in the event that a public means of transport has been used, as well as subsistence expenses (with the exception of those corresponding to drivers of goods road transport vehicles that do not exceed the daily amounts indicated in the rule), must, in principle, be justified by the employee or recipient of the per diem allowance, since the rule does not attribute the burden of proof to the paying entity, since they have been paid by him, the receipts being issued in his name, and the general criterion on the distribution of the burden of proof of article 105 of the LGT applies, which attributes to the taxpayer to prove those facts that are in his favor. The same could be said of the parking or toll expenses in the event that a private vehicle has been used.
Notwithstanding the foregoing, the accreditation of the link between these expenses and the economic activity of the paying entity shall be the responsibility of the latter, since it has the burden of proving the day, place and reason for the trip, i.e., that the travel expenses of the employees are due to work reasons and the organization of its economic activity. This does not prevent the recipient from voluntarily providing proof of such circumstances if available.
However, if the recipient of the amounts by way of per diems and allowances for travel expenses does not accredit within the verification procedure initiated with respect to him these expenses paid by him, alleging that such documentation is in the possession of the payer for having delivered it to him in order to be reimbursed on the occasion of the rendering of accounts, or that the paying company itself recognizes the exoneration of the amounts in the certificate of remuneration and deductions on personal work that is exhibited for this purpose or in the form 190 presented, the data of which is imputed to him by the company, or that the paying company itself recognizes the exemption of the amounts in the certificate of remuneration and withholdings on personal work that is exhibited for this purpose or in the form 190 presented, the data of which the Administration imputes to it, and with whose contents it does not disagree, the principle of availability of proof and evidential facility prevents the latter from making such amounts taxable without further ado in the income tax of the recipient, for lack of the corresponding justification, without first trying to obtain from the payer the necessary documentation by means of the appropriate requirement.
4.- If the Administration could prove that at the time of the verification procedure followed with the payee the relationship of the latter with the payer was such as to allow it full access to the evidence required to justify the exemption from taxation of the amounts received as per diems and allowances for travel expenses, then the Administration could exclusively address itself to the payee to obtain them, without the obligation to request the payer".
Finally, the excess received, if any, over the amounts indicated above is fully taxable as earned income, and as regards the applicable withholding, since it is earned income, it will be determined in accordance with the general procedure established in Article 82 and following of the Tax Regulations.
Which I hereby communicate to you with binding effects, in accordance with the provisions of paragraph 1 of Article 89 of Law 58/2003, of December 17, 2003, General Tax Law.
