Deduction for the acquisition of new fixed assets

1. Requirements

In order to apply the deduction for the acquisition of fixed assets, it is necessary:

• That investments be made in Canary Islands in new tangible fixed assets , excluding land, used for the development of the business activity of the entity.

  For these purposes, the following appraised categories are considered fixed assets:

  • Buildings and other constructions located in Spain.

  • Machinery, installations and tools.

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

  • Furniture and fixtures.

  • Information processing equipment.

  • Mining investigations.

• That the amounts invested be accounted for within fixed assets, except for those that refer to concepts that are in the nature of current expenses.

• That the elements remain in operation in the company of the same taxpayer for at least 5 years or during their useful life, if shorter, without being subject to transmission, lease or assignment to third parties for their use. use.

Taxpayers who dedicate themselves, through economic exploitation , to leasing or assigning fixed assets to third parties for their use, may enjoy this deduction, provided they meet the requirements set forth in the paragraphs above and there is no link, direct or indirect, with the lessees or assignees of said assets nor are they financial leasing operations.

This deduction is also allowed to be applied to movable property acquired under a financial lease that has an amortization coefficient equal to or equal to the amortization tables approved by the Order of May 12, 1993. greater than 10 percent. In this case, the applicable deduction percentage, which in no case will be higher than that generally established, will be calculated by multiplying the aforementioned general percentage by the result of the quotient formed by:

• In the numerator, the effective term in months of the financial leasing operation.

• In the denominator, the minimum period in months that, in accordance with the tax rules in force at the time of the contract, the asset acquired under a financial lease could be amortized.

The same investment may not give rise to the application of the deduction in more than one entity.

2. Deduction base

The basis of the deduction will be the total of the agreed consideration , excluding interest, indirect state taxes and their surcharges, which will not be computed in it, regardless of their consideration for purposes of asset valuation.

3. Computation of the deduction

Investments in tangible fixed assets that give the right to apply this deduction will be deemed to have been made in the tax period in which come into operation .

When the period elapsed between the firm order of the goods and the actual receipt by the entity is greater than two years, the deduction may be computed in the tax periods in which payments are made , for the corresponding part. This rule will also be applicable when the investment payment term is greater than two years.

4. Percentages

The deduction for the acquisition of new fixed assets continues to be applied in the Canary Islands in accordance with the deduction regime established in article 26 of Law 61/1978, of December 27, in its latest wording given by article 74 of the Law 19/1994, of December 30, with the specialties introduced by article 94 of Law 20/1991.

Therefore, the 5 percent deduction percentage established in article 26 of Law 61/1978, of December 27, may be increased in accordance with article 94.1.a) of Law 20/1991 . This article indicates that the rates applicable to investments made will be 80 percent higher than those of the general regime, with a minimum differential of 20 percentage points. In the case of this deduction, the percentage to be applied will be 25 percent , since it is the greater of the following two percentages:

• 5% x 1.8 = 9%
• 5% + 20% = 25%

5. Applicable limits

In the same way that the percentages are increased, the limits applicable to this deduction will also be increased in accordance with article 94.1. b) of Law 20/1991.

The deduction for investments in new fixed assets in the Canary Islands from both previous tax periods and tax period object of declaration is subject to a joint limit of 35 percent of the liquid quota.

Therefore, the joint limit of 35 percent in accordance with the provisions of section Seven of article 26 of Law 61/1978 and in article 94.1. b) of Law 20/1991 in the case of the deduction for investments in new fixed assets in the Canary Islands that come from both previous tax periods and the tax period being declared, will be increased to 70 percent, since it is the greater of the following two:

• 35% x 1.8 = 63%
• 35% + 35% = 70%