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Practical Handbook for Companies 2021

Deadline for making the investment

With regard to the deadline for the taxpayer to make the investment, Article 37.2 of the RDLeg. 4/2004 establishes that the investment in assets assigned to economic activities must be made within the period between the beginning of the tax period in which the profits subject to investment are obtained and two years thereafter or, exceptionally, in accordance with a special investment plan approved by the tax authorities at the taxpayer's proposal.

Thus, in addition to the two-year period, there is the possibility of a special investment term approved by the Tax Administration, therefore, taking into account that article 37.3 of the RDLeg.4/2004 provides that the deduction is applied to the full tax liability of the tax period in which the investment is made, for investments subject to longer time limits this deduction could continue to apply.