Company cars in Spain: the TEAC limits fuel taxation to actual private use (decision of 25 March 2026)

Published on 9 September 2026 · Bufete Padilla · Tax and Employment Law · Torrevieja, Elche and Moraira

If your Spanish company gives cars to employees and also hands them a fuel card or pays for car washes, this ruling matters to you: Spain's Central Economic-Administrative Tribunal (TEAC), in its decision of 25 March 2026 (claim 00/00346/2023, First Chamber), has limited the taxation of fuel to actual private use, rather than the flat availability percentage the Tax Inspectorate had been applying.

In plain money terms: many Costa Blanca companies have been over-paying their payroll withholding tax, and many employees have had their benefit-in-kind inflated by fuel they never burned on private journeys.

> The 30-second summary. The TEAC separates two things the Inspectorate treated identically. The car is an *asset*: its benefit arises from availability, so it is valued by applying the private-use percentage even if the employee never drives it. Fuel and car washing are *expenses*: their benefit arises from actual consumption, so they are only taxed to the extent genuinely consumed on private journeys, measured by kilometres driven and fuel used. This is a relevant criterion not yet reiterated, so it is not yet binding doctrine under article 239 of the General Taxation Act, but it can be relied on directly in an audit or a claim.

1. The case: a 2016-2019 withholding tax audit

The file arises from a general audit of a large company (identified as XZ SA) by the Tax and Customs Control Unit of the Central Large Taxpayers Office, notified on 28 September 2020 and covering, among other items, withholdings and payments on account for employment income from July 2016 to February 2019.

The company provided mixed-use vehicles to several groups of employees — store managers, sales managers and other commercial profiles — and, in most cases, added a card to pay for fuel and car washing, with the sole limit that supplies incurred abroad were not covered. The conditions were set out in a document signed by every recipient, entitled "Rules for the assignment and use of a company vehicle", which the Inspectorate treated as a genuine supplement to the employment contract.

The amount in dispute was 62,055.80 euros, corresponding to period 03/2018. The claim was filed on 17 January 2023 and registered at the TEAC on 19 January 2023.

2. The Inspectorate's mistake: applying the availability percentage to everything

The Inspectorate calculated an availability percentage for private use — essentially, the hours of the year falling outside the working time agreed in the collective bargaining agreement — and applied it automatically to two different things:

1. The value of the vehicle provided (20 % per year of the acquisition cost to the employer, under article 43 of the Personal Income Tax Act).
2. The amount of fuel and car washing paid with the card.

In other words: if the Inspectorate concluded the car was available for private purposes 70 % of the time, it taxed 70 % of the car's value as a benefit in kind and also 70 % of every petrol and car-wash invoice for the year, without checking at all how much fuel had actually been burned on private trips.