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Form 100. Personal Income Tax Declaration 2021

Investments in acquisition of fixed assets

The fourth transitional provision of Law 19/1994, of July 6 (BOE of 7), provides that in the event of suppression of the general regime of deduction for investments, its future application in the Canary Islands, as long as a system is not established. equivalent substitute, will continue to be carried out in accordance with the regulations in force at the time of deletion.

For this reason, in the Canary Islands the deduction for investments in fixed assets is maintained, which has disappeared in the rest of the territory, according to its latest regulation, established in the twelfth Additional Provision of the Corporate Tax Law.

New fixed assets

25% of the amount of investments in new elements of tangible fixed assets, excluding land, used for the development of economic exploitation, that have been made available during the year, may be deducted from the full quota.

Fixed assets used

25% of the amount of the investments may be deducted from the full quota for the acquisition of used fixed asset elements, which had not previously enjoyed the deduction for investments in the rest of the national territory, when they represent an obvious technological improvement for the company, in the manner and with the requirements established in Royal Decree 241/1992, of March 13 (BOE of March 14).

For the purposes provided for in article 94.3 of Law 20/1991, of June 7, used fixed assets that belong to any of the following categories will be entitled to the deduction for investments: (Royal Decree 241/1992):

  1. Machinery, installations and tools.

  2. Equipment for information processing.

  3. Elements of internal and external transport, excluding vehicles that may be used by people directly or indirectly linked to the company.

To be entitled to this deduction, the acquisition of the used fixed asset element must represent an evident technological improvement for the company, and this circumstance must be proven, in the event of verification or investigation of the taxpayer's tax situation, by justifying that the element object of the deduction will produce or has produced any of the following effects:

  1. Reduction in the unit production cost of the good or service.

  2. Improvement of the quality of the good or service.

The taxpayer must keep at the disposal of the Tax Administration certification issued by the transferor stating that the item object of the transfer has not previously enjoyed the deduction for investments or the Investment Provident Fund regime.

Deduction base

The basis of the deduction will be the acquisition price or production cost.

Investment maintenance

It will be a requirement to enjoy this deduction that the elements remain in operation in the company for five years, unless their useful life according to the amortization method, of those admitted for tax purposes, that is applied, is shorter.

Financial leasing

Investments made under a financial lease regime may benefit from this deduction, with the exception of buildings.

Deductions not applied due to insufficient quota

The amounts not deducted for this concept may be applied, respecting the limits that apply, in the settlements of the tax periods that end in the immediate and subsequent 15 years.