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Practical Handbook for Companies 2021

Deadline for reinvestment

  1. The reinvestment must be made within the period between the year prior to the date of disposal of the transferred asset and three years thereafter, or, exceptionally, in accordance with a special reinvestment plan approved by the tax authorities at the proposal of the taxpayer.When two or more transfers of shares in the capital or equity of any type of organisation have been carried out in the tax period, this period will be calculated from the end of the tax period.

    The reinvestment will be understood to have been made at the date on which the assets involved are made available.

  2. In the case of assets and liabilities that are the object of financial leasing contracts referred to in section 1 of the seventh additional provision of Law 26/1988, of 29 July, on the discipline and intervention of credit institutions, the reinvestment shall be deemed to have been made on the date on which the asset and liability element that is the object of the contract is made available, for an amount equal to its cash value.The effects of the reinvestment will be restricted to the fiscal year of the purchase option.

  3. The deduction will be applied to the gross tax charge corresponding with the tax period in which the reinvestment is made.Where the reinvestment has been made before the transfer, the deduction shall be made from the gross tax liability for the tax period in which the transfer is made.