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A taxpayer inquired whether, upon ceasing their economic activity, they must recognise the entire remaining grant amount or if they may continue to do so based on the depreciation of the asset. The DGT ruled that the total outstanding grant must be recognised as income in the year the activity ceases.
This ruling clarifies the tax treatment of capital grants upon the termination of business operations, requiring immediate recognition of any unamortised amounts.
The tax team reviews your specific situation.
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