Deductible expenses (Spain)

Scope: This is a Spain-specific overview for freelancers living/tax-resident in Spain (IRPF, IVA, Social Security). Figures/examples refer to Spain in 2025.

Deductible expenses are costs incurred in your economic activity that you subtract from income to compute net profit. Income tax is calculated on that net profit. In short: the more eligible expenses you record, the less you pay in tax.

This does not mean you should overspend; it means you should book every work-related expense. Example: many home-office translators forget to depreciate their office room, or don’t claim allowable vehicle-related costs. Each of those can easily save ~€1,000 net per year for just a couple of hours of bookkeeping.

Also remember: just as revenue is gross (you owe tax on it), expenses are pre-tax for you—work purchases are effectively cheaper than buying the same item privately.

Because IRPF is progressive, deductions have an even bigger impact: not all profit is taxed at the same marginal rate.

Example (Spain): replacing a printer (€450)
Accounts without the €450 printer:

• Income: €80,000

• Expenses: €10,000

• Estimated income tax due (single filer): €22,258.96

• Net profit after tax: €47,741.04

Accounts with the €450 printer:

• Income: €80,000

• VAT reclaim: 21% of the printer = €78.10 (IVA input tax credit)

• Expenses: €10,371.90 (i.e., €10,000 + €371.90 net)

• Estimated income tax due: €22,084.54

• Net profit after tax: €47,915.46

Real net cost of the printer:
€450 − €78.10 (VAT) − €174.42 (income-tax saving) = €197.48.
Thanks to VAT deduction + income-tax deductibility, the net cost is less than half the shop price. (Yes, the same logic applies—symmetrically—to revenue; most people just keep that in mind for income more than for expenses.)

Conditions for an expense to be deductible (Spain)

• Linked to the economic activity.

• Properly justified (invoices/receipts).

• Recorded in the accounts.

Examples of deductible expenses & typical annual amounts (Spain, freelance translator)

• Social Security contributions (RETA). Minimum in 2025 (general case): €313.13 × 12 = €3,757.56.

• IT equipment. Computer every 2–3 years, printer, etc.: €700.

• Software. OS, office suite, MT models, CAT tools: €400.

• Office furniture. Chair, desk, cabinet, files: €200.

• Training. Courses: €500.

• Travel to conferences/client meetings. Transport, meals, lodging: €1,000.

• Accountant (gestoría). Many do their own books; a gestor often ~€80/month → €1,000/year.

• Marketing. Ads, business cards: €50 (often minimal after a few years).

• Professional associations. €200.

• Landline & mobile. Only if dedicated business lines (no partial deduction).

• Internet access. €400.

• Website. Design, hosting: €30.

• Books, dictionaries, trade journals. (As incurred.)

• Professional liability insurance. €500.

• Private health insurance. Many rely on public coverage: €0 (if none).

• Cost of subcontracted work. (If you outsource.)

• Postage. €20.

• Bank fees. With low-fee accounts/negotiation, possibly €0.

Home office (Spain)

• If you use a room in your dwelling as an office, you may deduct a percentage of housing costs (declare the allocation on Modelo 036/037). Check the rules—there are many exceptions.

  • Purchase (ownership). You may deduct IVA proportionally to the office percentage (per AEAT guidance).

  • Depreciation (amortización). Typically 3% of purchase value, applied to the office percentage.

  • Rent. Deduct the office percentage only.

  • Utilities (suministros). 20% of the office percentage (statutory rule).

  • Water, gas, electricity, heating. As above.

  • Community charges. Office percentage only.

  • Cleaning (domestic help, supplies). Office percentage only.

  • Mortgage. Interest only, and only the office percentage.

  • IBI (property tax). Office percentage only.

Flat allowance (“gastos de difícil justificación”). 5% of positive net income, capped at €2,000/year.

Non-deductible

• Fines, penalties, surcharges.

• Donations.

How much do freelancers actually spend?
Hard to know—no solid stats. A full-time translator who invests in professional assets/services can often deduct around €15,000/year.

© 2025 Alejandro Moreno Ramos, www.ingenierotraductor.com