a. Rents and charges

In general

This heading includes expenses arising from rent, fees, technical assistance, etc., for the transfer to the taxpayer of assets or rights that are related to the activity, when ownership of the same is not acquired. 

The concept of “royalties” will include the fixed or variable amounts paid for the right to use or the concession of use of the different manifestations of industrial property.

For the concept of “lease” , the amounts paid for the rental or operating lease or for the transfer of movable and immovable property for the use or disposal of the company.

Special cases

Without prejudice to the above, the specialities discussed in the following sections must be taken into account for the purposes of determining the deductible amounts for this concept.

1. Leasing contracts

Regulations: Art. 106 LIS

A specific tax regime is established for financial leasing contracts in which the following requirements are met:

• That the lessor is a credit institution or a financial credit institution. 

• They must have a minimum duration of 2 years when they are aimed at movable property and 10 years when they are aimed at real estate or industrial establishments.

  However, in order to avoid abusive practices, other minimum duration periods may be established by regulation depending on the characteristics of the different assets that may constitute their object.

• That the financial leasing fees appear expressed in the respective contracts, differentiating the part that corresponds to the recovery of the cost of the asset by the leasing entity, excluding the value of the purchase option and the financial burden required by it, all without prejudice to the application of the corresponding indirect tax.

• That the annual amount of the part of the financial leasing installments corresponding to the recovery of the cost of the asset must remain the same or increase over the contractual period.

Concept of financial leasing contracts: With effect from 28 June 2014, Law 10/2014, of 26 June, on the regulation, supervision and solvency of credit institutions ( BOE of 27 June) defines in its Third Additional Provision the concept of financial leasing operations as "those contracts whose exclusive purpose is the transfer of the use of movable or immovable property, acquired for that purpose according to the specifications of the future user, in exchange for consideration consisting of the periodic payment of fees. The assets to be transferred must be assigned by the user only to his/her agricultural, fishing, industrial, commercial, artisanal, service or professional operations. The financial leasing contract will necessarily include a purchase option, at its end, in favor of the user."

Once these requirements are met, your tax deductibility regime is as follows:

a. The entire portion of the installments corresponding to the financial burden paid to the leasing entity is considered a tax-deductible expense.

b. The portion of the financial leasing fees paid to the lessor that corresponds to the recovery of the cost of the asset is considered a deductible expense with the following two limitations:

1. The deductible amount may not exceed the result of applying twice the maximum linear amortization coefficient according to the officially approved amortization tables to the cost of the asset. 

   In the case of taxpayers (businessmen or professionals) who are considered as small company for tax purposes, the linear amortization coefficient according to the tables will be multiplied by three for these purposes.

   The table of amortization coefficients applicable in the normal form of the direct estimation method is contained in article 12.1.a) LIS. In the simplified form of the aforementioned regime, the applicable amortization table is contained in the Order of March 27, 1998 ( BOE of March 28).

   For the calculation of the aforementioned limit, the moment in which the asset is put into operating condition will be taken into account. Any excess amounts that are not deductible as a result of this limitation may be deducted in subsequent tax periods, with the same double or triple limit of the amortization coefficient indicated above.

2. In the event that the object of the contract is land, plots of land and other non-depreciable assets, this portion of the fee does not constitute a deductible expense. In the event that such condition is met only in part of the asset subject to the transaction, only the proportion corresponding to the elements susceptible to amortization may be deducted, which must be expressed separately in the respective contract.

   Note: In the event that the contract does not meet the requirements set forth in Article 106 of the LIS, the financial burden paid will be considered a tax-deductible expense, as well as an amount equivalent to the amortization installments that, in accordance with the amortization systems established in Article 12.1 of the LIS, would correspond to the asset that is the object of the contract.

2. Specialties in the Personal Income Tax on transfers to economic activity of assets and rights belonging exclusively to members of the family unit

Regulations: Art. 30.2.3 Law Income Tax

When the taxpayer's spouse or minor children who live with him/her transfer assets or rights that serve the purpose of the economic activity in question, the holder of said activity may deduct, to determine the income from said activity, the consideration stipulated for said transfer, provided that it does not exceed the market value and, in the absence of the former, the latter may be deducted.

Correlatively, the stipulated consideration, or the market value, will be considered capital income of the spouse or minor children for all tax purposes.

Note: Unlike the above, the use of assets common to both spouses by the spouse who carries out an economic activity is not considered a transfer for tax purposes and does not generate any remuneration between them. Therefore, even if compensation had been stipulated, it will not be deductible.