The internet connection costs borne by a teleworker in 2020 cannot be considered deductible expenses
In its recent binding consultation of 28 May 2021, the Tax Authority, through its Personal Income Tax Subdepartment, has declared that the internet connection costs borne by a teleworker in 2020 cannot be considered deductible expenses when determining net earnings from employment.
The consulting party states that, during 2020 he worked remotely from home, with the company having provided him with the computer and monitor and the worker required to bear the internet connection costs.
The following question was asked: can the aforementioned costs be considered deductible expenses for the purpose of determining his net earnings from employment?
The Personal Income Tax Subdepartment (a body that is part of the Tax Authority) cites art. 19.2 of Personal Income Tax Act 35/2006, of 28 November to settle the consultation:
“Only the following will be considered deductible expenses:
a) Civil servants’ contributions to Social Security or mandatory mutual funds.
b) Deductions for pensions.
c) Contributions to orphan schools or similar entities.
d) Contributions paid to trade unions or professional associations, when affiliation is mandatory, for the amounts corresponding to the essential purposes of these institutions and up to the legally established limit.
e) Any legal defence costs that arise directly from legal disputes regarding the relationship between the taxpayer and the person from whom he/she receives his/her earnings, with a limit of 300 euros per year.
f) To cover other expenses that do not appear above, 2,000 euros per year. (…)”
As a result, the Personal Income Tax Subdepartment recognises that, pursuant to the aforementioned legal provision, “the expenses referred to by the consulting party would not be deemed to be deductible expenses when determining net earnings from employment, as such expenses are not included in the deductible expenses set forth in the aforesaid article for illustrative purposes”.
Furthermore, in the opinion of this body, the generic amount of 2,000 euros per year set forth in section f) of the aforementioned legal provision, “serves the purpose of including any expenses that are difficult to specify, quantify or justify or which are not included in the expressly stipulated expenses in the aforementioned art. 19 of the Tax Act and which correspond directly or indirectly to earnings obtained from employment”.