Amortization of vines and trellises: DGT criteria for agricultural companies

Agricultural companies frequently face the difficulty of accounting for the wear and tear of specific elements of their activity that are not detailed in the official amortization tables. A recent ruling from the Dirección General de Tributos (DGT) has provided clarity on the tax treatment of vines and trellises.

What the DGT has ruled

The ruling addresses the application of amortization coefficients for cultivation elements that are not included in the amortization table of Article 12.1.a) of the Law on Corporate Income Tax (LIS). In the absence of such inclusion, the DGT establishes that the entity has two legal paths to proceed:

• Proposal of an amortization plan: The company may propose a specific plan to the Administration, based on Article 12.1.d) of the LIS and Article 7 of the Corporate Income Tax Regulation (RIS).
• Amortization by effective depreciation: The entity may amortize the amount it considers to be real depreciation, provided it is able to justify said amount in accordance with Article 12.1.e) of the LIS.

In this second case, the DGT emphasizes that the taxpayer has the obligation to provide the necessary means of proof to certify the declared depreciation.

What this means for you

If you manage an agricultural company, this criterion confirms that you are not exclusively limited to the LIS tables for elements such as vines or trellises. You have the flexibility to adapt amortization to the technical reality of your operation, either through a planning method or through the verification of real wear and tear. However, this flexibility carries a greater burden of responsibility regarding the technical documentation that supports the applied amounts.

What should be done

It is fundamental that the entity has a solid documentary basis. If effective depreciation is chosen, it is necessary to have reports or evidence that demonstrate the deterioration or loss of value of the cultivation elements. The choice between a proposed plan or effective depreciation should be based on the company's ability to technically justify each amount before a possible inspection by the Administration.