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Form 100. Personal Income Tax Return 2022

Investments in the acquisition of fixed assets

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

In accordance with the interpretative criteria established by the Supreme Court in Judgment No. 605/2024, of April 10, issued in contentious-administrative cassation appeal No. 1299/2022, the regulations to be applied are those contemplated in article 26 of Law 61/1978, of December 27, on Corporate Tax, and in its Regulations, approved by Royal Decree 2631/1982, of October 15, regulations in force at the time of its repeal, on the understanding that there is no equivalent substitute regime in the current LIS.

New fixed assets

Taxpayers can deduct from the total tax 25% of the investments they actually make in new fixed assets.

In no case will land be considered new fixed assets.

Taxpayers who engage, through an economic operation, in the leasing or transfer of fixed assets to third parties for their use may enjoy the deduction for investments in new fixed assets, provided that they meet the remaining requirements provided and there is no direct or indirect link with the lessees or transferees of said assets, nor are they financial leasing operations.

Used fixed assets

Taxpayers may deduct from the total amount 25% of the amount of investments for the acquisition of the used fixed asset item that had not previously enjoyed this deduction for investments in tangible fixed assets.

Fixed assets belonging to one of the following categories will be eligible for the investment deduction:

  1. Machinery, facilities and tools.

  2. Information processing equipment.

  3. Internal and external transport elements, excluding vehicles that may be used by persons directly or indirectly linked to the company.

To be eligible for this deduction, the acquisition of the used fixed asset must represent a clear 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 proving that the item subject to the deduction will produce or has produced any of the following effects:

  • Decrease in the unit production cost of the good or service.

  • Improving the quality of the good or service.

Deduction base

The basis for the deduction shall include the entire agreed consideration, excluding interest, indirect state taxes and their surcharges, which shall not be included in it, regardless of their consideration for the purposes of the valuation of the assets.

Time of computation of the deduction

Investments in tangible fixed assets that give rise to the investment deduction shall be deemed to have been made in the tax period in which they come into operation.

Deductions not applied due to insufficient quota

The amounts not deducted for this concept may be applied, respecting the limits that apply to them, in the liquidations of the tax periods that conclude in the immediate and successive 15 years.