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V2271-20 3 July 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · valor de adquisición

Earthworks and land levelling considered an improvement to the land's acquisition value

A farmer inquired whether expenses related to earthworks and levelling prior to the construction of a greenhouse are deductible. The DGT ruled that these costs must be treated as an improvement to be incorporated into the acquisition value of the land.

The question raised

Deductibility in Personal Income Tax of expenses derived from earthworks and land leveling.

The DGT's ruling

The cost of earthworks and land leveling must be treated as an improvement to the asset. Therefore, it is incorporated into the acquisition value of the land and is not depreciable, as the value of the land is not included in the calculation of real estate depreciation.

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