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Practical Handbook for Companies 2021

Freedom to depreciate with job conservation

In the 11th additional provision of the RDLeg. 4/2004 in the wording given by Article 6 of Royal Decree-Law 6/2010, of 9 April, on measures to boost economic recovery and employment, established the freedom of tax depreciation of investments in new items of tangible fixed assets and investment property used for economic activities (if these investments are made under finance leases, provided that the purchase option is exercised) made available to the taxpayer in tax periods beginning in 2009, 2010, 2011 and 2012, with the requirement of maintenance of employment (which is detailed in the rule itself) during the twenty-four months following the date of commencement of the tax period in which the items haveFor contracts for the execution of works or investment projects which require a period of more than two years between the date of commissioning or commencement of the investment and the date on which it is made available or put into operation, the freedom of depreciation shall only apply in respect of ongoing investment made within tax periods commencing within those years.

This eleventh additional provision was repealed with effect for investments made on or after 31 March 2012 by the sole repealing provision of Royal Decree-Law 12/2012 of 30 March 2012.

However, section 2 of the thirteenth transitional provision of the LIS establishes that taxpayers who had made investments up to the entry into force of Royal Decree-Law 12/2012, to which the eleventh additional provision of RDLeg.4/2004, as amended by Article 6 of Royal Decree-Law 6/2010, and have amounts pending application corresponding to the freedom of amortisation, they may apply these amounts under the conditions established therein.

For tax periods starting within 2015, the thirty-fourth transitional provision of the LIS in letter b) maintained the transitional regime applicable to the amounts pending depreciation relating to investments made up to 30 March 2012 and covered by the freedom of depreciation provided for in the eleventh additional provision of RDLeg.4/2004 in the wording given by article 6 of Royal Decree-Law 6/2010, by virtue of which, such outstanding amounts may be applied in tax periods in which the requirements of article 108 of RDLeg.4/2004, with the limit of 40 per per cent of the tax base prior to its application, to the integration referred to in Article 11.12 of the LIS and to the offsetting of tax losses.

The same limit shall apply to investments in progress up to the entry into force of Royal Decree-Law 12/2012, which correspond to new elements commissioned under contracts for the execution of works or investment projects whose execution period requires a period of more than 2 years between the date of commissioning or commencement of the investment and the date on which it is made available or put into operation.

However, for tax periods starting on or after 1 January 2016, taxpayers who made investments before the entry into force of Royal Decree-Law 12/2012 may continue to apply the freedom of depreciation without the 40 percent limitation.In other words, they will be able to write off the full value of the outstanding fixed assets.

Filling in form 200

Taxpayers who apply the freedom of depreciation under the conditions established in this section should make the following adjustments in the boxes [00514] and [00509] "Freedom of depreciation with maintenance of employment (RDL 6/2010 and DT 13ª.2 LIS)" on page 12 of form 200:

  • In the box [00509] of decreases shall enter the excess of depreciation over the accounting depreciation, which is deductible for tax purposes in the tax period being declared.

  • In the box [00514] of increases, enter the amount of the depreciations posted in the tax period being declared and which had already been deducted in previous tax periods by means of the corresponding decrease or negative adjustment to the accounting result.Likewise, in the case of , in the tax period in which the element on which the freedom of depreciation has been applied is transferred, the amount of the negative adjustments made previously, and which have not yet been positively included in the tax base, should be included in this box [00514].