Amortization rules

A. Amortization base

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. In the event of acquisition of goods and subsequent impact on the economic activity carried out, the amortization will be based on the acquisition value of the goods at the time of the impact.

B. Beginning of amortization calculation

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 if it belongs to intangible fixed assets.

C. Amortization of intangible assets

As of January 1, 2016, all intangible fixed assets are considered assets with a defined useful life and are amortizable applying the following criteria:

In general, intangible assets will be 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 (5 percent).

Likewise, the amortization of goodwill will be deductible with the maximum annual limit of one twentieth of its amount (5 percent).

Now, it must be taken into account that article 39 of the Commercial Code in the wording given by the first Final Provision of Law 22/2015, of July 20, on Audit of Accounts (BOE of 21) applicable to the years that begin as of January 1, 2016, provides that intangible fixed assets are assets with a defined useful life and that when the useful life of these assets cannot be estimated reliably, they will be amortized over a period of 10 years, unless otherwise provided by law. or regulation establishes a different term.

In the case of goodwill, the aforementioned article 39 of the Commercial Code states that it may only appear in the balance sheet asset when it has been acquired for consideration and it will be presumed, unless proven otherwise, that the useful life of the goodwill It's ten years.

As a consequence of the above, in intangible fixed assets in which their useful life cannot be reliably estimated and in the case of goodwill, the accounting amortization will be 10 percent while tax amortization l will be 5 times 10, so in the eleventh to twentieth years there will be no accounting expense for amortization, but there will be tax amortization.

Please note that until December 31, 2015, the tax deductibility of intangible assets with an indefinite useful life , including goodwill, was carried out not through amortization but through of the valuation corrections that should be made due to its possible "deterioration". Therefore, when the reversal of an impairment or value correction that has been tax deductible occurs, the amount corresponding to the reversal of the impairment or value correction must be included with the limit established by the fifteenth transitional provision of LIS , whose comment is made in the section on " Losses due to impairment of the value of heritage elements " of this Chapter.

D. Heritage elements used

In the case of property elements of tangible fixed assets and real estate investments that are acquired used, that is, that are not put into operating conditions for the first time, the calculation of depreciation in those cases in which depreciation by tables is used 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.

E. Excess amortization

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.

Note: Article 7 of Law 16/2012, of December 27, which adopts various tax measures aimed at consolidating public finances and promoting economic activity (BOE of 28) established for taxpayers who did not comply the requirements to be considered small companies, a limitation on the deductibility of the accounting amortization of tangible and intangible assets and real estate investments in the years 2013 and 2014 of up to 70 percent of the amount that would have been tax deductible for application of the general amortization systems or that provided for elements of intangible assets with a defined useful life. The accounting amortization that was not tax deductible (30 percent) can be deducted from 2015 on a straight-line basis over a period of ten years or, optionally, over the useful life of the asset.

Precision: repealing provision 2.z) of LIS declares article 7 of Law 16/2012 in force with regard to Corporate Tax.