Freedom to depreciate (boxes 00311 and 00312)
According to the provisions of the first paragraph of article 11.3 of the LIS , the deduction of the excess of tax amortization by application of the freedom of amortization with respect to accounting amortization is not conditional on its accounting entry in the profit and loss account.
Therefore, small entities that apply this tax incentive under the terms of article 102 of the LIS, must make the following adjustments in boxes [00311] and [00312] «Small companies: freedom of amortization (art. 102 LIS) » on page 13 of model 200:
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In box [00312] of reductions, they must include the amount of the excess of the tax amortization over the accounting amortization , of the corresponding element or elements, although said excess is not accounted for. In the tax periods subsequent to the one in which the element or elements in question have been fully depreciated for tax purposes, they must include in box [00311] of increases the amount of the accounting amortizations that remain on said elements.
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In the tax period in which the transfer of the element or elements covered by the freedom of amortization occurs, they must include box [00311] of increases, the amount of the total of corresponding negative adjustments made and pending to be positively integrated into the tax base.
Below is an example of how small entities apply freedom of amortization, and how they should transfer these calculations to model 200 (you can also consult Example 2 of the section « Accelerated amortization » on how these entities apply freedom of amortization and accelerated amortization together).
Example:
Company "R", which meets the necessary requirements for the application of tax incentives for small companies in 2021, has acquired new property, plant and equipment for an amount of 200,000 euros. The acquisition is carried out on January 1, 2021, the date on which such elements are made available to Company "R" and come into operation. The financial year of Company "R" coincides with the calendar year. It is estimated that the residual value of the elements is not significant, so the amortizable value coincides with the acquisition price.
The total average workforce of Company “R” in 2020 was 8.4 workers. Given that it still does not know the average workforce for the twenty-four months following January 1, 2021 (years 2021 and 2022), Company "R" must consider the convenience of determining the amount on which it can fiscally apply the freedom of amortization , since the average increase in staff applicable to the figure of 120,000 euros cannot be calculated.
Company "R" decides to freely amortize the entire 200,000 euros in 2021 under article 102 of the LIS, given that it estimates that it will meet the requirements for increasing the average workforce and maintaining it. The accounting provision for amortization is made by applying a coefficient of 20 percent, which the company estimates as effective depreciation of such elements.
Corrections that Company "R" can make to determine the tax base of the Corporate Tax corresponding to 2021 (box [00312]):
| Accounting amortization | Tax amortization | Decrease in the result of the profit and loss account |
|---|---|---|
| 200,000 x 20% = 40,000 | 200,000 | 160,000 |
As of December 31, 2022, Company "R" already knows the average workforce for the twenty-four months included in the years 2021 and 2022, which is 10.6 workers. So,
Pm(2021 - 2022) - Pm2020 = 10.6 - 8.4 = 2.2
The limit applicable to the freedom of amortization carried out in 2021 is 2.2 x 120,000 = 264,000. Thus, Company "R", by freely amortizing 200,000 euros in 2021, did not exceed the aforementioned limit.
Furthermore, assuming that the average workforce for the years 2023 and 2024 has been 10.8 workers, the increase in the average workforce for these years, compared to 2020, is 2.4 (10.8 - 8.4) . In this way, Company "R" has maintained the increase in staff of 2.2 workers for the years 2021-2022 compared to 2020. In short, Company "R" has met all the requirements to be tax deductible in 2021 for the amortization of 200,000 euros made.
In this case, the corrections to be made in fiscal year 2023 and following (boxes [00311] and [00312]) will be:
| Financial year | Accounting amortization | Tax amortization | Correction | Form 200 |
|---|---|---|---|---|
| 2021 | 200,000 x 20% = 40,000 | 200,000 | -160,000 | [00312] |
| 2022 | 200,000 x 20% = 40,000 | --- | +40,000 | [00311] |
| 2023 | 200,000 x 20% = 40,000 | --- | +40,000 | [00311] |
| 2024 | 200,000 x 20% = 40,000 | --- | +40,000 | [00311] |
| 2025 | 200,000 x 20% = 40,000 | --- | +40,000 | [00311] |
Total accounting amortization = 40,000 + 40,000 + 40,000 + 40,000 + 40,000 = 200,000
Total tax amortization = 200,000