# Regularisation procedure

The regularization of deductions for investment assets is carried out as follows:

1. It is based on the deduction made in the year of purchase.

2. The amount that would correspond to the regularization year is subtracted by applying the final percentage for this year to the borne quota.

3. The positive or negative difference is divided by 5 (or by 10 if it is land or buildings) and the resulting quotient is the amount of complementary income or deduction to be made, respectively.

Complementary income and deductions will be made in the last self-assessment of the year.

Example:

A company acquired a machine in year “n-1” for 20,000 euros, plus 4,200 euros of VAT . The proportion of “n-1” was 50%.

We are going to see the different possibilities that can occur depending on the operations carried out in “n”.

1. If the proportion of “n” is 67%.

It must be regularized, because the deduction percentage applicable in the year of repercussion (“n-1”) and that applicable in the year of regularization differ by more than 10 percentage points: (50% - 67%) = 17%

• Deductible VAT year of purchase (“n-1”): 4,200 x 50% = 2,100 euros
• Deductible VAT this year (“n”): 4,200 x 67% = 2,814 euros
• Total: (2,100 euros - 2,814 euros) = - 714 euros

• The negative difference is divided by 5 and the resulting quotient will be the amount of complementary deduction to be made: (-714 ÷ 5) = -142.8 euros

You are entitled to a complementary deduction of 142.8 euros that will be reflected in the "Regularization of investment assets" box of the declaration model.

2. The pro rata percentage of “n” is 58%.

Since the pro rata percentage applicable in “n” (58%) differs by less than 10 points from that applicable in “n-1” (50%), it is not appropriate to regularize the investments: (50% - 58%) = 8%

3. The deduction percentage of “n” is 30%.

It is necessary to regularize the deductions made due to a difference of more than 10 points in the percentages: (50% - 30%) = 20%

• Deductible VAT year of purchase (“n-1”): 4,200 x 50% = 2,100 euros
• Deductible VAT this year (“n”): 4,200 x 30% = 1,260 euros
• Total: (2,100 euros - 1,260 euros) = 840 euros

• The positive difference is divided by 5 and the resulting quotient will be the amount of the complementary income to be made: (840 ÷ 5) = 168 euros

Therefore, the amount of 168 euros preceded by the minus sign will be entered in the "Regularization of investment assets" box of the declaration model, that is, a lower deduction that represents complementary income.