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Practical Handbook for Companies 2021

Requirements

  • The deduction will be applied to the profits obtained in the year, excluding corporate income tax, which are invested in new tangible fixed assets or real estate investments, provided that they are used for economic activities and the conditions established in article 37 of RDLeg are met. 4/2004.

    Investment in new items can also be made through a leasing contract.

  • Generally speaking, the investment must be made within the period between the start of the tax period in which the investment benefits are obtained and the two subsequent years.Exceptionally, the taxpayer may request the Tax Administration to approve a special investment plan.

  • The investment shall be understood to be effected on the date on which the provision of assets is made available, including for those subject to the leasing contracts referred to in paragraph 1 of the seventh additional provision of Law 26/1988, of 29 July.However, in the latter case, the deduction shall be conditional on the exercise of the purchase option.

  • The companies that apply this deduction should set up a reserve for investments, for an amount that is equal to the deduction base. This reserve will be unavailable, in that the assets invested in must remain in the company.

    The reserve for investments must be set up using profits from the fiscal year, whereby the amount is used for the investment.

  • Capital assets being invested in should remain part of the company's assets for a period of 5 years, or throughout the useful life of the asset if this is shorter, except in the case of a justified loss.

    However, the deduction will not be lost if the assets are transferred before the end of the period indicated in the previous paragraph and the amount obtained or the net book value, whichever is lower, is invested in accordance with the terms established in article 37 of the RDLeg.4/2004.

  • Until the time limit for the maintenance of the investment has expired, the taxpayer shall disclose in the notes to its annual accounts information on:the amount of benefits received from the deduction and the year in which they were obtained;the unavailable reservation which must be equipped;Identification and amount of items purchased;and the date or dates on which the elements have been the subject of acquisition and allocation to economic activity.

Failure to comply with any of the requirements set out in Article 37 of the RDLeg.4/2004 will determine the loss of the right to this deduction, and its regularisation in the manner established in article 137.3 of the aforementioned regulation.