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Form 100. Personal Income Tax Return Declaration 2017

9.8.4.3. Fixed asset acquisitions (25% deduction)

The fourth transitional provision of Law 19/1994, of July 6 (Official State Gazette of the 7th), provides that in the event of the abolition of the general deduction regime for investments, its future application in the Canary Islands, as long as an equivalent substitute system is not established, will continue to be carried out in accordance with the regulations in force at the time of the abolition.

For this reason, in the Canary Islands the deduction for investments in fixed assets is maintained, which has disappeared in the rest of the territory, according to its latest regulation, established in the Twelfth Additional Provision of the Corporate Tax Law.

New fixed assets

25 of the amount of investments in new tangible fixed assets, excluding land, used for economic exploitation, which were made available in 2016, may be deducted from the total tax.

Used fixed assets

Investments may also be made in used fixed asset items , which have not previously enjoyed the deduction for investments in the rest of the national territory, when they represent a clear technological improvement for the company, in the manner and with the requirements established in Royal Decree 241/1992, of March 13 (BOE of March 14).

Deduction base

The basis for the deduction will be the purchase price or production cost.

Maintaining investment

To be eligible for this deduction, the items must remain in operation in the company for five years, unless their useful life, according to the depreciation method, of those allowed for tax purposes, that is applied, is less.

Financial leasing

Investments made under a financial leasing scheme, with the exception of buildings, may be eligible for this deduction.

Maximum deduction limit

The amount of this deduction of the special regime for investments in the Canary Islands applied in the tax period may not exceed 50 percent of the quota resulting from reducing the sum of the full state and regional or complementary quotas (boxes 499 and 500) by the total amount of the deductions for investment in habitual housing (boxes 501 and 502) for investments and expenses in assets of cultural interest (boxes 504 and 505) and the deduction for investment in new or recently created companies (box 503).

This limit, which is applied independently of those corresponding to investments under the general regime and to other deductions under the special regime for investments in the Canary Islands, is calculated and applied by the program.

USED FIXED ASSETS (Royal Decree 241/1992)

For the purposes set forth in article 94.3 of Law 20/1991, of June 7, used fixed assets belonging to any of the following categories will give the right to the deduction for investments:

  1. Machinery, facilities and tools.

  2. Information processing equipment.

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

Technological improvement

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

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

  2. Improving the quality of the good or service.

Certification of the transmitter

The taxpayer must keep available to the Tax Authority a certificate issued by the transferor stating that the item being transferred has not previously benefited from the deduction for investments or the Investment Pension Fund regime.