Working from home means higher bills for electricity, water, internet, and even your mobile phone. The good news is that some of these expenses can be deducted if you’re self-employed. However, tax authorities have strict rules for calculating these deductions, and you’ll need proper documentation. Here’s how to make the most of these deductions.

How Does It Work?

Home utilities and mobile phone expenses are deductible if they are directly linked to your professional activity. However, tax authorities apply specific rules:

Home Utilities:

• First, calculate the percentage of your home dedicated to work.
• Then, apply 30% of that percentage to the total utility costs, including electricity, water, gas, or internet.

Mobile Phone:

• The mobile phone must be used exclusively for professional purposes to qualify for deduction. If the same number is used for both work and personal calls, you won’t be able to deduct any expenses. To avoid issues, it’s recommended to have a separate line exclusively for professional use.

Key Requirements

Clear Documentation:

• All invoices must be in your name and linked to the address you’ve declared as professional.
• For the mobile phone, the contract and invoices must correspond to a number exclusively for professional use.

Professional Use:

• The declared space or service must be strictly related to your professional activity.

Declaration of Professional Space:

• For utilities, declare the percentage of your home used for work on Form 036.

How to Calculate Deductible Expenses (IRPF)

• Utilities (Electricity, Water, Gas, Internet):
  Deductible Expense = Total Expense × % of Professional Space × 30%
• Mobile Phone:
  Deductible Expense = Total Mobile Cost (100% if exclusively professional)

Case Study

Pedro works from home and uses a 20 m² room (20%) in a 100 m² house as his office. His expenses in 2023 were:

• Electricity: €1,200.
• Water: €600.
• Internet: €480.
• Professional Mobile Phone: €360 (deductible because it is exclusively for work).

Deduction Calculation:

1. Electricity: €1,200 × 20% × 30% = €72 deductible.
2. Water: €600 × 20% × 30% = €36 deductible.
3. Internet: €480 × 20% × 30% = €28.80 deductible.
4. Mobile Phone: €360 × 100% = €360 deductible.

Total Deductible Amount: €72 + €36 + €28.80 + €360 = €496.80 annually (IRPF)

Which Taxes Allow These Deductions?

Personal Income Tax (IRPF):

• Home utilities and the mobile phone are deductible as explained, provided all requirements are met.

Value-Added Tax (VAT):

• Recent TEAC Resolutions: Open the door to partially deducting VAT on utilities for those working from home. However, criteria have yet to be defined, and the applicable percentages are expected to be quite low.
• In the meantime, mobile phone expenses are VAT-deductible if the number is exclusively professional.

Corporate Tax (IS):

• Utilities and mobile phone expenses are deductible, provided they are used exclusively for professional purposes.
• Recommendation for Small Businesses: Administrators should maintain a personal mobile line in their name while the company has a separate line exclusively for professional use.

What Does the Tax Authority Say?

According to the Spanish Tax Authority’s basic tax information service, utility deductions must follow the 30% rule applied to the percentage of the home dedicated to work. Regarding VAT, recent TEAC resolutions acknowledge the possibility of partial deductions, but specific criteria are still pending.

Our Experience

In our work with self-employed professionals, we’ve observed that:

• Utilities are commonly accepted if properly justified.
• VAT on utilities is under review: While the TEAC recognizes the possibility of partial deductions, it’s advisable to wait for defined percentages to avoid errors. Please mind the deadline for deducting VAT is 4 years … so maybe it´s better wait a few months until all this is clearer, and then deduct all your 2025 utilities expenses in the last quarter of 2025.
• Mobile phones often raise questions: Tax authorities are strict about exclusive use. To avoid problems, we recommend having a mobile contract exclusively for professional purposes and a separate personal line.

Conclusion

Deductions for home utilities and mobile phones can significantly reduce your tax burden, provided you follow the rules and maintain proper documentation. For VAT on utilities, it’s best to stay informed about updates from the TEAC and wait for clearer criteria.

👉 Do you know how to optimize your professional expenses? We love discussing this! Send us a message or contact us at hola@taxmentum.com (we’ll answer your questions for free ... we just want to meet you!).



👉 Are you a Tax Advisor or Business Consultant? Share your experiences with these types of expenses in the comments ... we love connecting with other professionals!

Important Note: This content is for informational purposes only and does not constitute tax, accounting, or legal advice. Every situation is unique, so we recommend consulting a lawyer or tax advisor before making decisions based on this information.