Freedom of amortization with job creation

Regulations: Art. 102 LIS

Requirements

Holders of economic activities whose net income is determined by direct estimation, in either of its two modalities, and in which each and every one of the requirements listed below are met, may benefit from this incentive.

1. That the economic activity is considered a small company for tax purposes in the year in which the investment is made .

   For these purposes, the investment will be deemed to have been made when the assets are made available to the owner of the activity.

2. That they are new elements of tangible fixed assets and real estate investments, related to economic activities, made available to the taxpayer in the tax period in which the economic activity is considered a small business. 

   The investment may also be made in elements ordered under a contract for the execution of works signed in the tax period, provided that they are made available within 12 months of their completion.

   The investment may also be made in tangible fixed assets and real estate investments built by the company itself, provided that the completion of the construction takes place within the following 12 months or in the tax period in which the economic activity is considered to be a small company.

   If new tangible fixed assets and investment property are acquired under a financial lease, the purchase option must be exercised.

3. That during the 24 months following the date of the start of the tax period in which the acquired assets come into operation, the company's total average workforce increases compared to the average workforce of the previous 12 months, and said increase is maintained for an additional period of another 24 months.

   To calculate the total average workforce of the economic activity and to determine the increase, the persons employed in accordance with the terms established by labour legislation will be taken into account, taking into account the contracted working day in relation to the full working day. This should therefore include workers with open-ended contracts, limited-duration contracts, temporary contracts, apprenticeship contracts, training contracts and part-time contracts.

4. That the maximum amount of the investment that is freely amortized does not exceed the amount resulting from multiplying the figure of 120,000 euros by the increase in the average total workforce of the economic activity calculated with two decimal places.

   If each and every one of the above requirements is met, the freedom of depreciation may be applied from the entry into operation of the elements eligible for it.

Incompatibility

Contracted workers who entitle the disabled to a deduction for job creation (article 38 of the LIS) will not be counted for the purposes of the freedom of amortization with job creation for small companies in article 102 of the LIS. Contracted workers who give rise to one of the deductions provided for in article 37 of the LIS (deductions for job creation) will not be counted either.

Consequences of failure to comply with the obligation to increase or maintain staff

In the event that, after the application of the tax benefit, the obligation to increase or maintain the workforce is not fulfilled, the full amount corresponding to the excess deducted must be paid, plus the corresponding late payment interest. The payment of the aforementioned fee and the late payment interest will be made together with the self-assessment corresponding to the tax period in which
one or the other obligation has been breached.

Note: The freedom of amortization for low-value investments that the previous consolidated text of the Corporate Income Tax Law regulated in its article 110 only for small-sized entities has been replaced in the new LIS by a similar benefit applicable to all taxpayers of the aforementioned tax.