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Practical Heritage Manual 2022.

11. Administrative concessions

Regulations: Art. 21 Wealth Tax Law

The valuation of administrative concessions for the exploitation of services or assets of public domain or ownership, whatever their duration, must be carried out by applying the criteria contained in article 13 of the consolidated text of the Law on the Tax on Property Transfers and Documented Legal Acts, approved by Royal Legislative Decree 1/1993, of September 24 ( BOE of October 20).

General valuation rules:

Pursuant to the provisions of said article and as a general rule, the value of the right arising from the concession shall be determined by the application of the rule or rules that, taking into account the nature of the obligations imposed on the concessionaire, are applicable from those indicated below:

  1. When the Administration sets a total amount as a price or fee, which must be paid by the concessionaire, for the amount thereof.

  2. When the Administration establishes a fee, price, participation or minimum profit that the concessionaire must pay periodically, two situations must be distinguished:

    • If the duration of the concession is not greater than one year, for the total sum of the periodic benefits.

    • If the duration of the concession is longer than one year, the annual amount paid by the concessionaire will be capitalized at 10%.

    When applying this rule, when it is necessary to capitalize an annual amount that is variable exclusively as a result of the application of price review clauses, which take objective indices of their evolution as a reference, the amount corresponding to the first year will be capitalized. If the variation depends on other circumstances, the mathematical reason for which is known at the time of granting the concession, the amount to be capitalized will be the annual average of those that the concessionaire must pay during the life of the concession.

  3. When the concessionaire is obliged to revert certain assets to the Administration, the estimated net book value of said assets at the date of the reversion will be computed, plus the expenses anticipated for the reversion. To calculate the net book value of the assets, the depreciation tables approved for the purposes of Corporate Tax will be applied at the average percentage resulting from them.

Special valuation rules:

In special cases where, due to the nature of the concession, the value cannot be set by the rules set out above, it will be determined in accordance with the following rules:

  1. Applying to the value of the fixed assets affected by the exploitation, use or benefit in question, a percentage of 2% for each year of duration of the concession, with a minimum of 10% and without the maximum being able to exceed the value of the assets.

  2. In the absence of the previous assessment, the one indicated by the respective public administration will be taken.

  3. In the absence of the two previous rules, by the value declared by the interested parties, without prejudice to the right of the Administration to proceed to its verification by the means provided for in the General Tax Law.