In fiscal years 2013 and 2014, big-sized companies are obliged to reduce a 30% of the tax deduction of depreciation and amortizations. As a general rule, such reduction can be recovered as of 2015.
The Spanish General Directorate of Taxes clarifies in which scenarios it is not required to wait up until 2015 for such recovery.
✔ In fiscal years starting in 2013 and 2014, the Corporate income tax deduction of fixed & intangible assets as well as real estate investments depreciations is limited to 70% of the accounting depreciation that would otherwise be tax deductible without this limitation.
The amounts that do not qualify for the tax deduction, must be the object of a positive book to tax adjustment to the taxable result, and shown in the Corporate income tax return.
✔ The tax rules set forth that such amounts can be deducted, for tax purposes, on a straight-line method throughout a 10-years period or, at the taxpayer’s option, during the asset’s useful life, in the first fiscal year starting as of 2015.
This option reflects the possibility that, if the asset’s useful life ends before the mentioned 10-years term, the deduction can be anticipated.
In this case, a negative book to tax adjustment is required when computing the taxpayer’s taxable base.
✔ Such deduction can be anticipated in two specific scenarios that should not go unnoticed: when, prior to the first fiscal year starting in 2015, the fixed & intangible assets as well as real estate investments no longer form part of the Company’s assets because of (i) their transfer; or, (ii) on de-recognition of the asset.
In such cases, it must be noted that the Spanish general directorate of taxes (CV3642-13), has clarified that the tax deduction can be done all at once in the fiscal year which the transfer or de-recognition take place.
A criterion to take into account when computing the Corporate income taxable result of big-sized companies, specially taking into account the strong tax pressure they have suffered in recent years.