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V2971-17 16 November 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · reserva para inversiones en canarias

Acquisition of used property may qualify as initial investment for the RIC if small entity requirements are met

Consultants inquired whether the purchase of a used property could be considered an initial investment for the Canary Islands Investment Reserve (RIC). The Directorate General for Taxes (DGT) ruled that, provided the conditions for small entities are met, the acquisition of used tangible fixed assets (excluding land) may constitute an initial investment.

The question raised

Whether the acquisition of said used property can be considered an initial investment under letter A of Article 27.4 of Law 19/1994.

The DGT's ruling

If the taxpayer meets the conditions of Article 101 of Law 27/2014 (small-scale entities), the investment may consist of the acquisition of used tangible fixed assets. For the purchase of a used property to be considered an initial investment under letter A of Article 27.4 of Law 19/1994, the land value must be excluded and it must be ensured that the asset has not previously benefited from the RIC. In entities with pass-through taxation, the net business figure refers to the net amount determined by the entity in its activity.

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