B Law & Tax
10 May 2023

Tax advisor: Impossibility for divorced people to deduct the electricity bill of their children’s home

The Personal Income Tax Act does not allow divorced taxpayers to deduct in their income tax return the maintenance expenses of the family home where their ex-wife and children live, even if they have committed to pay them. The Directorate General of Taxes (DGT) has recently clarified that it is only allowed to subtract the amount of the compensatory pension and the annuities for alimony fixed by the judge (except those paid to the children). The DGT rejects the possibility of including these expenses as deductions in the income tax return because they are not contemplated in the Personal Income Tax Act, and points out that the payment of these expenses cannot be considered as a compensatory pension in favor of the taxpayer’s ex-wife.

The civil law establishes that the payments for electricity, water and internet of the family home where the children and the taxpayer’s ex-partner live cannot be considered as part of the compensatory pension or child support. Therefore, the taxpayer cannot apply the special regime provided in the tax law to deduct these expenses. Specifically, the Personal Income Tax Act only allows deducting the amount of the compensatory pension and the annuities for alimony fixed by the judge. In addition, for the income destined to the payment of the child support, a lower tax rate is established, which can mean a saving in the tax.

The DGT reminds that, according to the Spanish Civil Code, child support payments include everything necessary for their sustenance, housing, clothing and medical care, such as education expenses and those related to pregnancy and childbirth. However, the expenses for the maintenance of the home in which the children reside are not included in this category.

B Law & Tax International Tax & Legal Advisors.

 https://www.blaw.es/

“En B LAW&TAX somos especialistas en asesoramiento fiscal internacional tanto a empresas como para particulares. Si desea ampliar la presente información, estaremos encantados de poder atenderle en el 917817194 o en [email protected]