Repayments

Will be deductible amounts that, in concept of repayment of the tangible fixed assets, intangible and of investment properties, correspond to the effective depreciation that suffer different elements for operation, use, enjoy or obsolescence.

Depreciation is treated as effective when:

• It is calculated using the linear depreciation rates established in the table contained in the Corporation Tax Act (the straight-line method).

• It is the result of applying a constant percentage to the value pending depreciation.

• It is the result of applying the sum-of-the-digits method.

• It is calculated according to a scheme formulated by the taxpayer and accepted by the Tax Agency.

• The taxpayer can provide an acceptable justification for the amount.

Property, plant and equipment and real estate should be amortised over their useful lives.

According to the PGC , useful life is understood as the period during which the company expects to use the amortizable asset or the number of production units it expects to obtain from it.

Yes, the following items can be freely amortised:

1. Tangible and intangible assets and real estate investments of Spanish public limited employee-owned companies and Spanish limited employee-owned companies held for use in the performance of their activities, acquired in the first five years after the date of their classification as such.

2. Tangible and intangible assets, excluding buildings, used in research and development activities.

3. Buildings can be depreciated on a straight-line basis over a period of 10 years, from when they are put to use for research and development activities.

4. Expenses on research and development activities such as intangible assets, excluding amortisation of items eligible for free amortisation.

5. Tangible and intangible assets of entities classified as priority association operations in accordance with Act 19/1995 of 4 July on modernisation of farming operations, acquired during the first five years from the date of their recognition as a priority operation.

6. Elements of new tangible fixed assets whose unit value does not exceed 300 euros, up to the limit of €25,000 referred to the tax period. If the tax period were less than one year long, the stated limit would be the result of multiplying 25,000 euros by the corresponding proportion between the duration of the tax period with respect to the whole year.

The amounts applied to free amortisation/depreciation will be reduced, for tax purposes, the value of the amortised/depreciated items.

In tangible assets are amortised over the course of their useful life. When this cannot be estimated reliably, the depreciation will be deductible with the annual maximum limit of one twentieth of their amount. The differentiation between intangible assets of a definite and indefinite useful life has been removed. When this cannot be determined, the depreciation will be deductible with the annual maximum limit of one twentieth of their amount.

The above points are not applicable when the intangible assets, including goodwill, were acquired before 1 January 2015.

The fourth Final Provision of Royal Decree-Law 23/2020, of June 23, introduced the sixteenth Additional Provision in the LIS , which includes a new assumption of freedom of amortization in investments made in the electric, sustainable or connected mobility value chain. In this sense, the sixteenth Additional Provision in the LIS , in its wording given by Royal Decree-Law 34/2020, includes the tax incentive of freedom of amortization on investments made in the electric, sustainable or connected mobility value chain for investments made in the tax periods ending between April 2, 2020 and June 30, 2021. In this way, investments in new elements of tangible fixed assets that involve the sensing and monitoring of the production chain, as well as the implementation of manufacturing systems based on modular platforms or that reduce the environmental impact, affected by the automotive industrial sector, made available to the taxpayer and that come into operation between April 2, 2020 and June 30, 2021, may be freely amortized, provided that, during the 24 months following the start date of the tax period in which the acquired elements come into operation, the total average workforce of the entity remains with respect to the average workforce for the year 2019. It should be noted that maximum amount of the investment may benefit from the free amortization regime will be .

In addition, to apply this assumption of freedom of amortization, taxpayers must provide reasoned report issued by the Ministry of Industry, Trade and Tourism to qualify the taxpayer's investment as suitable. This report will be binding on the tax authorities.

This new assumption of freedom of amortization regulated in the Sixteenth Additional Provision of the LIS is incompatible with the assumption of freedom of amortization established in article 102 of the LIS for small entities, so these entities will have to choose to apply one of the two tax incentives.

The Eighteenth Additional Provision of the LIS establishes that investments in new vehicles FCV , FCHV , BEV , REEV or PHEV , as defined in Annex II of the General Vehicle Regulations, approved by Royal Decree 2822/1998, of December 23 , affected by economic activities and that come into operation in the tax periods beginning in the years 2023, 2024 and 2025, may be amortized based on the coefficient resulting from multiplying by 2 the maximum linear amortization coefficient provided for in the officially approved amortization tables.

With effect for tax periods beginning on or after January 1, 2024 , ## Additional Provision 18 of Law 27/2014 is amended 2## by article 4 One of Royal Decree-Law 4/2024, in order to replace the hitherto in force accelerated amortization system with free amortization , provided that they are new investments that come into operation in the tax periods beginning in 2024 and 2025 .

Article 22 of Royal Decree Law 18/2022 introduces a new seventeenth Additional Provision in Law 27/2014, of November 27, on Corporate Tax, by which taxpayers may freely amortize the investments made in facilities intended for the self-consumption of electrical energy , as well as those facilities for thermal use for own consumption , provided that they use energy from renewable sources and replace facilities that use energy from non-renewable fossil sources and that are made available to the taxpayer as of the entry into force of Royal Decree-Law 18/2022 (October 20) and come into operation in 2023.

They will be freely amortized in the tax periods that begin or end in said year, provided that, during the 24 months following the start date of the tax period in which the acquired elements come into operation, the total average workforce of the entity remains the same as the average workforce of the previous twelve months.

However, buildings will not be eligible for the freedom of depreciation regulated in this provision.

The maximum amount of the investment that may benefit from the free amortization regime will be 500,000 euros .

Entities to which the tax incentives for small companies provided for in Chapter XI of Title VII of Law 27/2014 of 27 November on Corporate Income Tax apply may choose between applying the free amortisation regime provided for in Article 102 of this Law or applying the free amortisation regime regulated in this provision.