Hotels cannot apply shift-based depreciation to furniture or technical systems

The tax treatment of asset depreciation in the hotel sector has been delimited following a recent resolution from the Dirección General de Tributos (DGT). The controversy lay in whether elements that remain at the customers' disposal 24 hours a day can benefit from the special rule for depreciation by work shifts.

What the DGT has ruled

The DGT has ruled that the depreciation rule provided for in Article 4.2 of the Corporate Income Tax (IS) Regulations is not applicable to those elements whose continuous availability is inherent to the provision of the hotel service. This includes, for example, furniture in rooms or common areas.

Likewise, this criterion extends to elements that, due to their technical nature, require uninterrupted operation, such as fire detection systems or the Wi-Fi network. In these cases, constant availability does not equate to use by work shifts in the sense required by the regulations.

However, the administration admits that this rule can indeed be applied to specific and duly identified elements used in more than one shift in ancillary services, such as kitchen machinery, laundry, or maintenance tools, provided that their use is not intrinsically continuous.

What this means for you

For companies managing hotel establishments, this resolution limits the possibility of accelerating the depreciation of much of their main assets. If your tax strategy was based on applying shift-based depreciation to furniture or technical installations to reduce the taxable base, you must adjust your calculation models to the ordinary depreciation tables.

The key lies in distinguishing between the use of an asset by staff in different shifts and the mere availability of the asset to the customer uninterruptedly. The latter situation does not grant the right to the tax benefit.

What should be done

It is necessary to perform a detailed analysis of the company's asset list to separate those that meet the requirements of Article 4.2 of the Corporate Income Tax (IS) Regulations from those that do not. Specifically, elements of ancillary services (kitchen, laundry, or maintenance) that do allow this depreciation must be identified, ensuring that their shift-based use is duly documented and is separate from the continuous availability nature of the hotel.