Skip to content
Back to index
V3037-14 5 November 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · deterioro de valor

Impairment of advances paid for real estate is deductible if recorded in accounts

A real estate developer inquired whether the impairment of an advance payment for the purchase of plots can be deducted as an expense. The DGT ruled that if the impairment is recorded in accordance with accounting standards, it will be tax-deductible in the same period.

The question raised

Whether an expense may be recognized in the 2013 fiscal year for the amount claimed.

The DGT's ruling

In order for the impairment of advances to be deductible, the corresponding accounting impairment loss must be recognized. The treatment of the impairment of advances for inventories must follow the criteria for impairment of inventories. Consequently, it shall be deductible in the tax period in which it is recorded in the profit and loss account, as the TRLIS does not establish specific rules for the impairment of inventories.

Book your free first meeting