Differences between accounting and tax depreciation

The article 12.1 of the LIS establishes that the amounts that correspond to the effective depreciation of tangible fixed assets, intangible assets and real estate investments due to operation, use, enjoyment or obsolescence are deductible.And depreciation shall be deemed to be effective when:

1. Be the result of applying the coefficients of straight-line depreciation set out in the following table:

   Element type		Linear coefficient maximum	Period of years maximum
   Civil works	General civil engineering work	2 per 100	100
   	Pavements	6 per 100	34
   	Infrastructures and mining projects	7 per 100	30
   Central	Hydroelectric plants	2 per 100	100
   	Nuclear power plants	3 per 100	60
   	Coal plants	4 per 100	50
   	Renewable energy plants	7 per 100	30
   	Other power plants	5 per 100	40
   Buildings	Industrial buildings	3 per 100	68
   	Land dedicated exclusively to landfill	4 per 100	50
   	Stores and deposits (gases, liquids and solids)	7 per 100	30
   	Commercial, administrative and services buildings and dwellings	2 per 100	100
   Facilities	Substations.Transport and power distribution networks	5 per 100	40
   	Cables	7 per 100	30
   	Other facilities	10 per 100	20
   	Machinery	12 per 100	18
   	Medical and similar equipment	15 per 100	14
   Transport elements	Trains, carriages and traction equipment	8 per 100	25
   	Ships, aircrafts	10 per 100	20
   	Internal transport elements	10 per 100	20
   	External transport elements	16 per 100	14
   	Dumper trucks	20 per 100	10
   Furniture and furnishings	Furniture	10 per 100	20
   	Lingerie	25 per 100	8
   	Glassware	50 per 100	4
   	Chattels and tools	25 per 100	8
   	Moulds, patterns and models	33 per 100	6
   	Other household goods	15 per 100	14
   Electronic and computer equipment. Systems and programmes	Electronic equipment	20 per 100	10
   	Computer equipment	25 per 100	8
   	Systems and computer programs	33 per 100	6
   Film, phonographic, video and audio-visual series productions		33 per 100	6

   The coefficients and periods provided for in this point may be amended or additional coefficients and periods may be established by regulation.

2. Let it be the result of applying a given constant percentage on the outstanding depreciation value.

   The constant percentage shall be determined by weighting the straight-line depreciation coefficient obtained from the depreciation period according to officially approved depreciation tables by the following coefficients:

   • 1.5, if the item has a depreciation period of less than 5 years.
   • 2, if the item has a depreciation period of 5 years or more but less than 8 years.
   • 2.5, if the item has a depreciation period of 8 years or more.

   The constant percentage may not be less than 11 percent.

   Buildings, furniture and fixtures are not eligible for depreciation by a constant percentage.

3. Let be the result of applying the method of the digit numbers.This method is not applicable to buildings, furniture and fixtures.

4. It conforms to a plan formulated by the taxpayer and accepted by the tax administration.

5. The taxpayer can justify the amount.

Filling in form 200

In application of the provisions of this precept, the following adjustments will have to be made in the boxes [00303] and [00304] "Differences between accounting and tax depreciation (art. 12.1 LIS)" on page 12 of form 200:

• When the accounting depreciation practised in the financial year by the taxpayer for any of the items referred to in Article 12.1 of the LIS is greater than the depreciation allowed for tax purposes according to the provisions of the aforementioned sections, the amount of this excess difference should be entered in the box [00303] of increases.Likewise, when the item in subsequent tax periods is depreciated for accounting purposes, the amount of this difference should be entered in box [00304] of decreases, as a result of the reversal of the positive adjustment, in accordance with the tax depreciation.

• And in the event that the depreciation allowed for tax purposes is higher than the accounting depreciation practised by the taxpayer for the aforementioned items (and it is not the case of an accounting error), the amount of the corresponding difference should be entered in the box [00304] of decreases.Likewise, when the item in subsequent tax periods is depreciated for tax purposes, the amount of this difference should be entered in box [00303] of increases, as a result of the reversal of the negative adjustment, based on the accounting depreciation.