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V1409-15 5 May 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · inversión inicial

Acquisition of promotional transport vehicles does not constitute initial investment in the Canary Islands

A catering company has enquired whether the purchase of new vehicles for client public relations purposes qualifies for investment incentives under the Canary Islands Economic and Tax Regime. The Directorate General of Taxes (DGT) has ruled that these vehicles do not qualify as initial investment assets.

The question raised

Whether, in accordance with Article 25 of Law 19/1994, on the Modification of the Economic and Tax Regime of the Canary Islands, the acquisition of new transport elements for the purpose of promotion and public relations with clients constitutes an investment in new tangible fixed assets eligible to benefit from the investment incentives contained in this Law.

The DGT's ruling

To benefit from the incentives provided in Article 25 of Law 19/1994, investment assets must be elements of tangible fixed assets acquired in connection with an initial investment (creation, expansion, diversification, or substantial transformation of an establishment). The acquisition of a passenger vehicle for promotional purposes does not meet the initial investment requirements provided for in the regulations.

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