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V3133-14 19 November 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · deducción por inversión de beneficios

Profit reinvestment deduction requires properties to be new assets

A company engaged in property leasing has enquired whether it can apply the profit reinvestment deduction under Article 37 of the TRLIS when acquiring two properties. The DGT has ruled that for the investment to be valid, the properties must be new assets, meaning they must be used for the first time.

The question raised

Whether the consulting entity may avail itself of the deduction for investment in profits under Article 37 of the consolidated text of the Corporate Income Tax Law, in relation to the real estate assets acquired.

The DGT's ruling

To apply the deduction provided for in Article 37 of the TRLIS, the real estate assets must be new elements, understood as such those that are used or put into operation for the first time. If the real estate assets have been previously used by the transferring entities or their predecessors, this requirement would not be met. As the history of use of the real estate assets is unknown, the DGT cannot determine the applicability of the deduction.

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