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V3235-14 2 December 2014 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · estimación directa

Software maintenance and update costs are deductible if recorded as an accounting expense

A professional inquired whether the costs of maintaining and updating their computer software were deductible within their economic activity. The Directorate General for Taxes (DGT) ruled that they are deductible provided they are accounted for as an expense rather than as an increase in the value of fixed assets.

The question raised

Question posed: To determine the deductibility of expenses derived from the maintenance and updating of the aforementioned computer software, for the purposes of determining the net income of the economic activity carried out by the applicant.

The DGT's ruling

For the determination of net income under the direct estimation method, expenses for the maintenance and updating of computer software shall be tax deductible if they are accounted for as an expense in the profit and loss account. They shall not be deductible if, according to accounting regulations, they must be capitalized as an increase in the value of fixed assets because they constitute an expansion, improvement, or renewal of the asset. They must comply with the requirements of accounting registration, accrual, correlation with income, and documentary justification.

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