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Practical Manual of Companies 2022.

Deduction for acquisition of used fixed assets

1. Scope

article 94.3 of Law 20/1991 establishes that, in addition to the elements that give the right to deduction in the general regime, investments may be also carried out on used fixed asset elements, that had not previously enjoyed the deduction for investments in the rest of the national territory, when they represent an evident technological improvement for the company , in the manner and with the requirements determined by regulation.

Therefore, the deduction for investment in new fixed assets is allowed to be applied to used fixed asset elements, provided that the requirements set out in the following section are met.

2. Requirements

  1. For the purposes provided for in article 94.3 of Law 20/1991, article 2 of Royal Decree 241/1992, of March 13, which develops Law 20/1991, of June 7, modifying the fiscal aspects of the Canary Islands Fiscal Economic Regime in relation to tax incentives for investment, establishes that used fixed assets that belong to any of the following categories will give the right to the deduction for investments:

    • Machinery, installations and tools.

    • Information processing equipment.

    • Elements of internal and external transport, excluding vehicles that may be used by people directly or indirectly linked to the company.

  2. The acquisition of the used fixed asset must represent an evident technological improvement for the company , and this circumstance must be proven, in the event of verification or investigation of the taxpayer's tax situation, by justifying the that the element object of the deduction will produce or has produced any of the following effects:

    • Decrease in the unit production cost of the good or service.

    • Improvement of the quality of the good or service.

  3. The taxpayer must keep at the disposal of the Tax Administration certification issued by the transferor stating that the item being transferred has not previously enjoyed the investment deduction or the Investment Provident Fund scheme.

3. Amount and applicable limits

The same amount and the same limits provided for in article 94 of Law 20/1991 for cases of will be applied to the deduction for investment in fixed asset elements used in the Canary Islands. deduction for investment in new fixed assets ##2##.