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Form 200. Corporate Income Tax Declaration 2019

4.2.9 Keys 01005 and 01006 amortization of intangible fixed assets and goodwill (Article 12.2 LIS) and amortization of DT 13ª.1 LIS

The first Final Provision of Law 22/2015, of July 20, on Account Auditing, has modified article 39.4 of the Commercial Code, establishing that for the financial statements that correspond to the years beginning on or after January 1, 2016, all elements of intangible fixed assets are considered assets with a defined useful life, becoming amortizable in that useful life. However, in cases where the useful life of these intangible assets cannot be determined reliably, they will be amortized within a period of 10 years, unless a legal or regulatory provision establishes a different period.

Regarding goodwill, article 39.4 of the Commercial Code allows its accounting amortization with effect from 1 January 2016, provided that it is acquired for valuable consideration. Unless proven otherwise, the useful life of goodwill shall be presumed to be ten years.

As a result of the changes made in the accounting field, Law 22/2015 has modified article 12.2 of the LIS establishing that for tax periods beginning on or after January 1, 2016, intangible assets will be amortized based on their useful life, and when this cannot be estimated reliably, the amortization will be deductible up to a maximum annual limit of one twentieth of its amount.

Regarding goodwill, article 12.2 of the LIS establishes the deductibility of the amortization of goodwill with an annual limit of one twentieth of its amount.

As a result of these changes, the accounting allocation of the amortization expense of these intangible assets will be required in order to apply their tax deductibility.

Therefore, for tax periods beginning on or after 1 January 2016, this new regime determines that intangible fixed assets will be amortized for accounting and tax purposes, based on their useful life. When the useful life of these elements cannot be determined reliably, they will be depreciated at 10% per year according to accounting regulations and at a maximum of 5% per year according to tax regulations.

Regarding goodwill, it will be amortized in the accounting field at 10% per year and at most at 5% per year in the tax field.

This difference of criteria from a fiscal and accounting perspective will generate the need to make adjustments to the taxable base of the Corporate Tax, the corrections of which will be recorded in the keys [01005] for increases and [01006] for decreases and, where applicable, in their corresponding breakdown boxes.

Finally, it should be noted that the thirty-fifth transitional provision of the LIS establishes a transitional regime whereby the provisions of article 12.2 of said regulation will not be applicable to intangible assets, including goodwill, acquired in tax periods beginning before 1 January 2015, from entities that are part of the same group of companies with the acquirer according to the criteria established in article 42 of the Commercial Code, regardless of residence and the obligation to prepare consolidated annual accounts.

Amortization of the DT 13.1 of the LIS

Section 1 of the thirteenth transitional provision of the LIS refers to the transitional regime for the application of the new depreciation coefficients to assets acquired prior to its entry into force, according to which:

  • Assets for which, in tax periods beginning before 1 January 2015, a different depreciation coefficient was being applied than that which would apply if the depreciation table provided for in article 12.1 of the LIS were applied, will be depreciated during the tax periods remaining until completing their new useful life, in accordance with the aforementioned table, based on the net tax value of the asset existing at the beginning of the first tax period beginning on or after 1 January 2015.

  • Taxpayers who were applying an amortization method other than that resulting from applying the linear amortization coefficients in tax periods beginning before January 1, 2015 and, in application of the amortization table provided for in the LIS, were assigned a different amortization period, may choose to apply the linear amortization method in the period remaining until the end of their new useful life, on the taxable net value existing at the beginning of the first tax period beginning on or after January 1, 2015.

  • New assets acquired between January 1, 2003 and December 31, 2004 will apply the maximum linear amortization coefficients provided for in the LIS, multiplied by 1.1.

In application of the different criteria established by the thirteenth transitional provision of the LIS, the taxpayer must make adjustments to the taxable base of the Corporate Tax, the corrections of which will be recorded in the keys [01005] for increases and [01006] for decreases and, where applicable, in their corresponding breakdown boxes.