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V0186-23 7 February 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · inmovilizado material

Self-produced breeding livestock valued at production cost

A livestock farmer asks how to value breeding livestock produced on their own farm. The DGT rules that the production cost criterion must be applied and that this value shall be considered business income.

The question raised

1st Production cost of breeding livestock obtained on the same farm.

The DGT's ruling

Livestock intended for reproduction or milk production is considered tangible fixed assets and must be valued at its production cost or acquisition price. The production cost is obtained by adding the price of raw materials and other directly attributable costs, plus a reasonable portion of indirect costs necessary to bring the asset into operating condition. The production cost of these elements produced by the company itself constitutes business income for the calculation of net income. Corresponding depreciation may be applied to this cost in accordance with the rules of the objective estimation method.

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