Skip to main content
Practical Manual of Companies 2021.

Accelerated depreciation

Regulation: Article 103 LIS

1. Requirements

  • They must be new elements of tangible fixed assets or real estate investments, as well as elements of intangible fixed assets, assigned to economic activities.

    These elements must be found in any of the following situations:

    • Acquired from third parties and made available to the company in the tax period in which it has the status of small size.

    • Commissioned through a work execution contract signed in the tax period in which it has the status of a small company and made available to the company within 12 months following completion of the same.

    • Built or produced by the company itself, in accordance with the temporal criteria established in the two previous sections.

  • With respect to assets that can be amortized accelerated, the accounting entry principle of article 11.3.1 of the LIS will not be applied, according to which expenses that are not tax deductible will not be have been accounted for in the profit and loss account or in a reserve account if this is established by a legal or regulatory standard.

    Therefore, although the excess tax depreciation derived from the application of accelerated depreciation is not accounted for, it is allowed to be deducted from the corporate income tax base.

2. Cost

  • As a general rule, the amount of the tax-deductible amortization will be that obtained by applying to the amortizable value a coefficient resulting from multiplying by 2 the maximum linear amortization coefficient provided for in the amortization tables officially approved.

    The officially approved amortization table is the one included in letter a) of article 12.1 of the LIS.

  • In the case of elements of intangible assets with an indefinite useful life referred to in article 13.3 of the LIS, acquired in the tax period in which they have the condition of reduced size, the company may deduct 150 percent of the amount resulting from applying said section.

    With effect for tax periods beginning on or after January 1, 2016, Law 22/2015, of July 20, on Account Audit repealed article 13.3 of the LIS and modified article 12.2 of said standard, passing all elements of intangible assets to be considered as having a defined useful life.

    Therefore, after these modifications, a reasonable interpretation of the standard allows us to consider that, within the intangible fixed assets, now commercially classified as assets with a defined useful life, referred to in article 12.2 of the LIS, those whose useful life cannot be estimated. reliably, as well as in the case of goodwill, may be deducted by 150 percent of the amount that is deductible if the provisions of article 12.2 of the LIS are applied to them.

3. Transitional scheme

The new regulation of the Corporate Tax eliminated the assumption of accelerated amortization provided for in article 113 of the RDLeg. 4/2004, applicable to small companies with respect to elements of tangible assets and real estate investments assigned to economic exploitations that are subject to reinvestment.

However, the twenty-eighth transitional provision of the LIS has established a transitional regime that allows small companies that were applying the provisions of article 113 of RDLeg. 4/2004, in periods beginning before January 1, 2015, continue its application with the same requirements and conditions provided for in said article:

  • Accelerated amortization applies to elements of property, plant and equipment and real estate investments assigned to economic operations in which the reinvestment of the total amount obtained in the onerous transfer of elements of property, plant and equipment takes place. and real estate investments also subject to economic exploitation, carried out in the tax period in which the conditions of article 108 of the RDLeg are met. 4/2004.

  • The amount of tax-deductible amortization is the result of applying to the amortizable value a coefficient resulting from multiplying by 3 the maximum linear amortization coefficient provided for in the officially approved amortization tables.

  • The reinvestment must be carried out within the period between the year prior to the date of the transferred asset element being made available and the three years following. The reinvestment is understood to have been carried out on the date on which the assets in which the amount obtained in the transfer is materialized are made available.

  • When the amount invested is higher or lower than that obtained in the transfer , accelerated amortization will be applied only to the amount of said transfer that is subject to reinvestment.