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V0214-14 29 January 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · actualización de balances

Inmueble value updates allowed without losing reinvestment deduction

A property rental company asks whether it can update the value of its properties in Spain and Chile, and whether this affects the deduction for extraordinary profit reinvestment. The DGT confirms that value updates are permitted for properties anywhere and do not conflict with such a deduction.

The question raised

The following questions are raised regarding the updating of balance sheets:

The DGT's ruling

Real estate properties in Spain or abroad may be updated independently if they are recorded as tangible fixed assets or investment properties and have not been fully depreciated for tax purposes. The update is not incompatible with the deduction for reinvestment of extraordinary profits under Article 42 of the TRLIS. The increase in value shall be depreciated starting from 2015 over the remaining useful life of the asset. A single tax of 5% must be paid on the revaluation reserve.

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