Current and capital subsidies

In relation to the subsidies received, a distinction must be made between capital and current subsidies.

• Capital grants are those whose primary purpose is to promote the installation or realization of investments in fixed assets (land, buildings, machinery, installations, etc.) and are recorded as income to the same extent as the fixed assets in which they have been materialized are depreciated.

  However, in those cases where the assets are not susceptible to amortization, the subsidy will be applied as full income for the year in which the sale or write-off in inventory of the asset financed with said subsidy occurs, applying the 30% reduction typical of returns obtained in a notoriously irregular manner over time .

• Current subsidies which are those normally granted to guarantee a minimum profitability or compensate for losses incurred in the activity, are computed in their entirety as another income in the period in which the granting of the subsidy is firmly recognized and quantified, regardless of the moment in which it is received and unless the taxpayer has opted for the collection and payment criterion, in which case they will be computed in the period in which they are collected.

  Note: Please note that the following grants are taxed as current subsidies:

  • Extraordinary and temporary direct aid to cover the price of diesel consumed by farmers and ranchers who are entitled to a partial refund of the Hydrocarbon Tax on diesel for professional use in article 52 ter of Law 38/1992, of December 28, on Special Taxes or the Special Tax of the Autonomous Community of the Canary Islands on Petroleum Derived Fuels, provided for in articles 24 et seq. of Royal Decree-Law 20/2022, of December 27, on measures in response to the economic and social consequences of the War in Ukraine and in support of the reconstruction of the island of La Palma and other situations of vulnerability ( BOE of December 28).

  • A direct aid to the agricultural sector granted in 2023 in compensation for the increase in costs caused by the rise in the price of fertilizers, derived from the situation created by the invasion of Ukraine provided for in article 30 of Royal Decree-Law 20/2022, of December 27 ( BOE of December 27), developed in Order APA /122/2023, of February 8 ( BOE of February 13), by which certain requirements and conditions are specified..

• Grants awarded to finance specific expenses : They are recorded as income in the same year in which the expenses they are financing are accrued.

  See in this regard the recording and valuation standard 18 of the General Accounting Plan.