Skip to main content
Practical Guide to Income Tax 2025. Part 1.

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.

    In this regard, the following should be taken into account: summary tableof measures approved as a consequence of the DANA contained in chapter 2 of this Manual.

    Note: Please note that direct grants to compensate for the effects of drought on agricultural production in certain provinces of the Spanish Mediterranean region, intended for producers of nuts in dryland farming and hazelnuts in irrigated farming, located in provinces that have suffered a significant loss of production due to drought in 2024, are taxed as current subsidies. These provinces are Almería, Alicante, Castellón, Murcia, Valencia and Tarragona. In this last province, hazelnut producers in irrigated areas will also be able to receive aid due to the lack of irrigation water suffered during 2024. See Royal Decree 347/2025, of April 22, approving direct aid to compensate for the effects of drought on agricultural production in certain provinces of the Spanish Mediterranean arc, as well as Commission Implementing Regulation (EU) 2025/441 of March 6, 2025.

  • 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.