# Expense Categories

Frihet classifies your expenses into tax categories that map directly to the deductibilities permitted by the Tax Authority.

## Default Categories

The system comes with standard categories for any type of business:

### Materials and Supplies

- **Raw Materials**: Materials that form part of the final product
- **Office Supplies**: Paper, ink, consumable items
- **Packaging**: Boxes, tape, shipping protection
- **Fuels and Lubricants**: Gasoline, diesel for company vehicles

These expenses are **100% deductible** from the taxable base of IRPF/Sociedades.

### Professional Services

- **Consulting and Advisory**: Fees for consultants, accountants
- **Technical Services**: Repairs, equipment maintenance
- **Advertising and Marketing**: Ads, design, social media management
- **Financial Services**: Bank commissions, administrative fees

Deductibility **100%** if the service relates to business activity.

### Infrastructure and Hosting

- **Server Rental**: Shared hosting, VPS, cloud
- **Domains and SSL**: Domain renewals, certificates
- **Storage**: NAS servers, cloud backups
- **SaaS Tools**: Subscriptions (accounting, CRM, email marketing)

Expenses **100% deductible** as third-party services.

### Housing and Office

- **Office Rent**: Total rent (if it's a separate premise)
- **Home Office Rent**: Deductible based on dedicated m²
- **Office Utilities**: Telephone, internet, water, electricity (proportionally)
- **Cleaning and Maintenance**: Professional cleaning services

Deductibility according to the degree of business use. Personal housing has limitations.

### Transportation and Travel

- **Fuel**: Gasoline for business trips
- **Tolls and Parking**: Toll payments, parking
- **Public Transport**: Plane, train, bus tickets for business trips
- **Per Diem**: Accommodation and meals during travel

Deductible **100%** if it is direct business travel. Commuting from home to office is NOT deductible.

### Other Expenses

- **Business Insurance**: Civil liability, work accidents
- **Professional Fees**: Professional associations
- **Training and Courses**: Related professional education
- **Books and Magazines**: Professional material
- **Fund Contributions**: Private pensions, investment funds (according to regulation)

Deductibility according to the specific nature of the expense.

## Automatic Tax Mapping

When you register an expense in Frihet:

1. **Select category** → System obtains the permitted deductibility
2. **Apply tax type** (IVA/IGIC/IPSI) → Calculates deduction
3. **Generate entries** → The expense appears correctly in the tax declaration

Frihet keeps the mapping updated according to regulatory changes (in Premium plan).

## Create Custom Category

If you need your own category:

1. Go to **Settings > Expenses > Custom Categories**
2. Create a new category with name and code
3. Assign default deductibility (0-100%)
4. Apply to future expenses

**Note**: Custom categories apply only to your account. For changes affecting all users, contact support.

## Analysis by Category

In **Reports > Expense Breakdown**:

- View total spent by category (month, quarter, year)
- Compare against budget if you have set it
- Export breakdown by category for your records
- Identify areas where you can optimize costs

## Regulatory Changes

Frihet notifies you when tax changes affect your categories. For example:

- Change in VAT percentage
- New permitted deduction
- Restriction of deductibility

Receive notification in dashboard and client portal.