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Form 100. Personal Income Tax Return Declaration 2017

Repayments

A deductible expense is the amount recorded in the concept of amortization of tangible and intangible fixed assets and real estate investments that corresponds to the effective depreciation suffered by the different elements due to operation, use, enjoyment or obsolescence.

Depreciation is considered effective when it is the result of applying any of the methods provided for in article 12.1.a of the Corporate Income Tax Law, which in summary are the following:

  1. Linear amortization according to amortization tables established in article 12.1.a of the Corporate Income Tax Law as of January 1, 2015.

  2. Constant percentage on the value pending amortization.

  3. Digit number method.

  4. Plan formulated by the taxpayer and accepted by the Administration.

  5. Justification of the amount by the taxpayer.

Tangible fixed assets and investment property will begin to be depreciated from the moment they are put into working order, and intangible fixed assets from the moment they are ready to generate income.

The assets of tangible fixed assets and real estate investments must be depreciated within their useful life, meaning the period in which, according to the depreciation method adopted, their value must be fully covered, excluding the residual value.

In the case of intangible assets, their useful life will be the period during which it is reasonably expected that income will take place.

Assets for which, in tax periods beginning before 1 January 2015, a different amortisation coefficient was being applied to that which corresponded to them by application of the new amortisation table provided for in article 12.1 of the LIS, will be amortised during the periods remaining until completing their useful life, in accordance with the aforementioned table, based on the net tax value of the asset existing at the beginning of the first tax period beginning on or after 1 January 2015.

Special procedures

ACQUISITION OF ASSETS BETWEEN JANUARY 1, 2003 AND DECEMBER 31, 2004.

For acquisitions of new assets made between January 1, 2003 and December 31, 2004, the maximum linear amortization coefficients established in the official amortization coefficient tables shall be understood to be replaced, in all references to them, by the result of multiplying those by 1.1. The new coefficient will be applicable during the useful life of the new assets acquired in the aforementioned period.

LEASE WITH OPTION TO PURCHASE:

  1. FINANCIAL LEASE OF ARTICLE 116 and Thirty-fourth Transitional Provision LIS

    Financial Lease Tax Regime .

    Requirements:

    1. That the landlord is a credit institution.

    2. That the contract has a minimum duration of two years when it concerns movable property or ten years when it concerns real estate or industrial establishments.

    3. That the financial leasing fees appear expressed in the respective contracts, differentiating the part that corresponds to the recovery of the cost of the asset by the leasing entity, excluding the value of the purchase option and the financial burden required by it.

    4. For the 2015 financial year only, the annual amount of this portion of these contributions may not exceed 50 percent of the cost of the asset in the case of movable assets, or 10 percent in the case of real estate or industrial establishments.

    Once the above requirements have been met, the fees paid enjoy the following tax treatment:

    1. The financial burden paid to the leasing entity is considered in all cases as a deductible expense.

    2. Regarding the part of the fees that corresponds to the recovery of the cost of the asset, it is necessary to differentiate:

      • Land and other non-depreciable assets: does not constitute a deductible expense.

      • Amortizable assets: It is considered a tax-deductible expense with a limit of double (triple for small companies) the linear amortization coefficient according to officially approved amortization tables. The excess will be deductible in successive tax periods, respecting the same limit.

    In the case of transfer of use of assets with an option to purchase or renew, provided that the amount payable for exercising the option is less than the amount resulting from reducing the value of the asset by the sum of the maximum amortization installments that would correspond within the maximum time of the duration of the transfer, it will be considered as a financial lease in the sense of rule 8 of the General Accounting Plan.   In this case, the transferee will be entitled to deduct an amount equivalent to the amortization instalments that, in accordance with the Corporate Tax regulations, including those relating to freedom of amortization, would correspond to the transferred assets.

  2. FINANCIAL LEASE CONTRACTS PRIOR TO 1-1-96 (DT 6 Law I. Companies)

    Financial leasing contracts entered into prior to the entry into force of Law 43/1995 (1 January 1996) that relate to assets delivered before that date or to real estate whose delivery has taken place within the following two years, shall be governed until fully complied with by the rules established in the Seventh Additional Provision of Law 26/1988, of 29 July (BOE, 30 July).

    According to this provision, the total amount of the lease payments, excluding the residual value for which the purchase option is exercised, will be considered a deductible expense. However, if the contract concerns non-amortizable elements, the part of the installments corresponding to the recovery of the cost of the asset for the lessor entity will not be deductible.