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Practical Manual for Companies 2023.

Deduction for acquisition of used fixed assets

1. Scope

Article of Law establishes that, in addition to the elements that entitle the deduction under the general regime investments may be made in used assets that have not previously enjoyed the deduction for investments in the rest of the national territory, when they represent a technological improvement for the company in manner and with the requirements that are determined by regulation.

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

2. Requirements

  1. For the purposes set forth 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 Economic Fiscal Regime of the Canary Islands in relation to tax incentives for investment, establishes that used fixed assets belonging to any of the following categories will give the right to the deduction for investments:

    • Machinery, facilities and tools.

    • Information processing equipment.

    • Internal and external transport elements, excluding vehicles that may be used by persons directly or indirectly linked to the company.

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

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

    • Improving the quality of the good or service.

  3. The taxpayer must keep at the disposal of the tax authorities certification issued by the transferor stating that the item being transferred has not previously enjoyed the deduction for investments or the Investment Provision Fund regime.

3. Amount and applicable limits

The deduction for investment in used fixed assets in the Canary Islands will be subject to same and limits as provided for in article 94 of Law 20/1991 for cases deduction for investment in fixed assets.