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Form 100. Personal Income Tax Declaration 2021

Amortization provisions

Deductible expenses constitute the amounts recorded that, as amortization of tangible and intangible assets and real estate investments, correspond to the effective depreciation suffered by the different elements due to operation, use, enjoyment or obsolescence.

Depreciation is considered to be effective when it is the result of applying any of the methods provided for in article 12.1.a of the Corporate Tax Law, which in summary are the following:

  1. Linear amortization coefficients established as of January 1, 2015 by the amortization table included in article 12.1.a) of the LIS.

  2. Constant percentage of the pending amortization value.

  3. Digit numbers method.

  4. Plan formulated by the taxpayer and accepted by the Administration.

  5. Justification of the amount by the taxpayer.

The basis of amortization is the acquisition price of the element, including additional expenses incurred until it is put into operating condition, or its production cost, excluding, where applicable, the residual value.

Amortization will be carried out from the moment the element is put into operating condition if it belongs to tangible fixed assets or real estate investments, or from the moment they are in a position to produce income for intangible fixed assets.

Intangible fixed assets are generally amortized over their useful life. However, when it cannot be estimated reliably, the amortization will be deductible with the maximum annual limit of one twentieth of its amount. The amortization of goodwill will be deductible with the maximum annual limit of one twentieth of its amount (5%).

The allocation in a year of amortizations greater than those allowed by tax does not constitute a deductible expense, without prejudice to the fact that the excess may be deductible in subsequent periods.

Used heritage elements

In the case of property assets and real estate investments that are acquired used, the amortization calculation will be carried out in accordance with the following criteria:

  • If the acquisition value of the used element is taken as the basis for amortization, the maximum usable coefficient will be twice the maximum linear amortization coefficient established in the amortization table.

  • If the acquisition price or original production cost is taken as the amortization basis, the maximum linear amortization coefficient set in the amortization tables for said element will be applied.

  • If the original acquisition price or production cost is not known, the taxpayer may determine it expertly, and once set, the procedure will be carried out in accordance with the provisions of the previous letter.

For these purposes, buildings that are less than ten years old will not be considered used heritage elements.

Amortization freedom assumptions

Freedom of depreciation in new elements of fixed tangible assets. Transitional scheme

Taxpayers who, as of March 31, 2012, had amounts pending application for the following investments that have enjoyed the freedom of amortization provided for in the eleventh Additional Provision of the consolidated text of the LIS:

  • Investments made in the years 2009 and 2010 to which the freedom of amortization with maintenance of employment of the eleventh Additional Provision of the consolidated text of the LIS is applicable, according to the wording given by Royal Decree-Law 6/2010, of April 9 , of measures to promote economic recovery and employment.

  • Investments made from January 1, 2011 to March 30, 2012 to which the freedom of amortization without employment maintenance of the eleventh Additional Provision of the consolidated text of the LIS is applicable, according to the wording given by the Royal Decree-Law 13/2010, of December 3, on actions in the fiscal, labor and liberalizing fields to promote investment and job creation.

Taxpayers who, as of March 31, 2012, had not fully amortized the investment made for this concept may continue to apply the amounts they have pending under the conditions and with the requirements established by the eleventh Additional Provision of the consolidated text of the LIS. , according to the wording given by Royal Decree-Law 6/2010, of April 9 and by Royal Decree-Law 13/2010.

The amounts pending amortization may be applied with the limit of the positive net return of the economic activity to which the assets have been affected prior to the deduction of the pending amounts and, where appropriate, the reduction of 5% for provisions. and expenses that are difficult to justify provided for the simplified direct estimation modality.

Freedom of amortization (article 12.3 of the LIS)

Yes, the following items can be freely amortised:

  • Tangible and intangible assets, excluding buildings, used in research and development activities.

  • Buildings can be depreciated on a straight-line basis over a period of 10 years, from when they are put to use for research and development activities.

  • Expenses on research and development activities such as intangible assets, excluding amortisation of items eligible for free amortisation.

  • Tangible and intangible assets of entities classified as priority association operations in accordance with Act 19/1995 of 4 July on modernisation of farming operations, acquired during the first five years from the date of their recognition as a priority operation.

  • Elements of new tangible fixed assets whose unit value does not exceed 300 euros, up to the limit of €25,000 referred to the tax period. If the tax period were less than one year long, the stated limit would be the result of multiplying 25,000 euros by the corresponding proportion between the duration of the tax period with respect to the whole year.

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