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V0111-14 20 January 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · amortización

Trees may be depreciated independently of land if accounted for separately

An agricultural company inquired whether an engineer's report constitutes sufficient evidence to separate the value and useful life of trees from the land. The Directorate General for Taxes (DGT) ruled that trees may be depreciated using specific coefficients, provided they are identified and separated in the accounts through appropriate supporting documentation.

The question raised

Whether said report would constitute sufficient evidence for the Administration to certify the value and useful life of the trees.

The DGT's ruling

It is possible to apply independent depreciation coefficients for the components of a rural estate (land and trees) provided they are significant, are accounted for separately, and their acquisition price or production cost can be justified. Land is not depreciable, but trees may be depreciated according to the RIS tables (group 011). The Administration will assess the means of proof provided to substantiate such accounting separation.

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