Per diems, mileage and employee travel: how to deduct them without surprises

A sales rep leaves Madrid first thing in the morning, drives to Zaragoza, has lunch with a client and returns at night. At the end of the month, the company pays them for the mileage and the meal. It looks like the simplest transaction in the world, and yet that expense claim brings together three different taxes, two regulatory limits and a burden of proof that falls mainly on the company.

Per diems and travel expenses are on the radar of both the Spanish Tax Agency and Social Security, and the difference between handling them well or badly is rarely the amount: it is the paperwork. In this article you will see what can be deducted for each tax, which amounts are exempt in 2026, how to treat fuel and rental cars, and what documentation you should have ready before anyone asks for it.

01. Three taxes, three different questions

The most common mistake is to think of “per diems” as a single tax concept. In reality, every payment to an employee for a trip raises three questions that are answered separately:

Corporate Income Tax (or the business owner’s Personal Income Tax): can the company subtract this expense from its profit?
The employee’s Personal Income Tax (IRPF): is this amount employment income subject to IRPF, or an allowance excluded from taxation
VAT: can the company recover the input VAT paid on the hotel, the restaurant, the rental or the fuel?

The answers do not necessarily match. An expense can be fully deductible for Corporate Income Tax while being partly taxable in the employee’s IRPF and giving no right to deduct VAT. Understanding that separation is the basis for everything else.

02. Exempt amounts in 2026 (common tax regime)

Article 9 of the IRPF Regulations sets how far the amounts you pay your team for business travel are not taxed as employment income. The latest update came with Order HFP/792/2023, which raised mileage from €0.19 to €0.26 per kilometre, and in 2026 the amounts remain unchanged:

Item	Spain	Abroad
Meals, with overnight stay	€53.34/day	€91.35/day
Meals, no overnight stay	€26.67/day	€48.08/day
Accommodation	Amount evidenced	Amount evidenced
Own vehicle	€0.26/km + tolls and parking	€0.26/km + tolls and parking
Public transport	Amount evidenced	Amount evidenced

Amounts under the common tax regime. The foral territories apply their own figures (for example, €0.29/km in Bizkaia and Gipuzkoa), and special rules apply to goods transport drivers and flight crew.

Meals

For meals, the employee does not need to provide a receipt for every lunch for the limit to apply: it is enough that the trip is real and evidenced together with the other requirements. That said, this does not replace the documentation you will need to deduct VAT. Paying more than the daily limit does not, in itself, prevent the company from deducting it, but the excess becomes employment income subject to IRPF and is included in the Social Security contribution base.

There are two conditions worth watching: the trip must be to a municipality other than the employee’s usual workplace and residence, and the stay cannot exceed nine continuous months in the same municipality. Be careful with this period: if it is exceeded, the loss of the exemption for meals and accommodation affects all the per diems for that assignment, not only those after the ninth month. Holidays or sick leave do not interrupt the count if the destination does not change.

Accommodation

Hotels have no cap: they are exempt for the amount evidenced by an invoice. It is advisable for the invoice to be issued to the company, with its tax ID (NIF), as this also makes it easier to deduct the VAT.

Travel: public transport, own car, rental and fuel

This is where most questions arise, and the key is who provides the vehicle:

Public transport (train, plane, bus, taxi): exempt for the amount of the ticket or invoice.
The employee’s own car: €0.26 per kilometre applies, plus evidenced tolls and parking. This amount is meant to cover fuel, wear and insurance, so fuel is not added on top.
Rental car hired and paid for by the company: when it is the company that hires the vehicle for the professional needs of the trip, the rental is a company expense, not remuneration for the employee. The same applies to fuel for a company vehicle used on business trips, provided it is properly evidenced.
Rental reimbursed to the employee: if the employee rents the car and the company later pays them an allowance, it should not be presented as automatically exempt at its actual cost. The Regulations distinguish between public transport, exempt for the amount evidenced, and other means of transport, which have their own rules.

In any case, it makes no sense to pay mileage at €0.26 and also the fuel for the same journey.

Traffic fines are outside all of this: criminal and administrative fines and penalties are not deductible for Corporate Income Tax (article 15.c of the Corporate Income Tax Act) and cannot be disguised as per diems.

03. What your company must be able to prove

The Regulations require the payer to evidence the date and place of the trip and its reason or purpose. The Spanish Supreme Court, in its judgment of 29 January 2020, made clear that when the Tax Agency reviews an employee’s per diems it must go to the company, which holds that information, rather than requiring it from the employee. This does not mean the Tax Agency must automatically accept any certificate issued by the company: the evidence must be genuine. In the field of Social Security, the Supreme Court, in its judgment of 21 July 2025 on excluding per diems from the contribution base, accepted that trips may be evidenced with the company’s ordinary business documentation and rejected requiring receipts for each specific expense within the applicable limits.

In practice, this means a simple but consistent record: one expense claim per trip with the date, destination, client or purpose, kilometres and supporting receipts attached. Per diems, even when exempt, must appear on the payslip and be reported on form 190.

04. VAT: where the most money slips away

The Spanish VAT Act, in principle, excludes the deduction of VAT on travel, hotel and restaurant services, unless the expense is deductible for direct tax purposes. That is why VAT on hotels or restaurants can only be recovered if three requirements are met: the expense is linked to the business, it is recorded in the accounts, and it is documented with a full invoice (or a simplified invoice including the recipient’s details) issued to the company.

A till receipt without a tax ID does not allow VAT to be deducted, although it does serve to evidence the expense. And mileage paid to the employee for using their own car carries no VAT, so there is nothing to recover. For passenger car rentals, the law presumes 50 % business use. You can deduct a higher percentage if you prove that this is the actual degree of business use, and 100 % if you show exclusively professional use. The law also presumes full business use in certain cases, including vehicles used by sales representatives or commercial agents for their business travel.

Fuel deserves separate treatment. VAT on fuel does not automatically follow the percentage applied to the vehicle: its deduction depends on proving its link to the business.

05. A practical example

Back to the sales rep from the beginning. They drive 650 km in their own car for the round trip, and the company pays them €35 for lunch. The mileage (650 × 0.26 = €169) is exempt for them and a deductible expense for the company. Of the lunch, €26.67 is exempt and the remaining €8.33 is added to their payslip as employment income subject to withholding and included in the contribution base.

For the company, the full €35 can be deducted for Corporate Income Tax provided the general requirements are met: the expense is real, recorded and evidenced, allocated to the correct tax year and related to the business. Exceeding the employee’s exempt limit does not, in itself, prevent that deduction.

06. Conclusion

Deducting your team’s travel expenses correctly is not about memorising a table, but about separating three questions that tend to get mixed up: whether the expense reduces the company’s profit, whether it is taxed in the employee’s IRPF, and whether its VAT is recoverable. The 2026 limits are known and stable; what makes the difference is having each trip documented with its date, destination and purpose.

If the Tax Agency asked you tomorrow to justify last year’s per diems, could you do it in an afternoon? If the answer is no, the time to put the system in order is now, calmly and before anyone asks. That, in the end, is the peace of mind of having everything in order.