Freedom of amortization in the IS: Application

The TEAC in criterion unification establishes that the freedom of amortization is an option.

An entity presents its statement of the IS corresponding to the year 2013 without applying any adjustment for freedom of amortization. After receiving a requirement to verify if it had adequately applied the 70% depreciation limitation for the years 2013 and 2014, it decides at the stage of processing of claims and settlement proposal to request a negative extra-budgetary adjustment to apply the remainder of freedom of amortization not applied in previous years and in this way mitigate the increase in the tax base shown by the tax administration.

This request is not accepted when the Tax Administration understands that the application of the freedom of amortization is an option. The same happens when he files an appeal for reinstatement. However, the Regional Economic Administrative Court of Cantabria does give the reason to understand that the adjustment for freedom of amortization is not an option, but the exercise of a right, which the taxpayer can exercise within the statute of limitations or expiration, may exercise it in the regularization that may occur in the course of a verification procedure.

In view of the resolution of the Regional Economic Administrative Court of Cantabria, the Director of the Inspection Department of the AEAT files an extraordinary recourse of appeal for the unification of criteria, to determine if the freedom of amortization is an option and, consequently, when it can be exercised.

In this regard, the TEAC, based on the doctrine established by the Supreme Court on the options, considers that the freedom of amortization is an option and its exercise can only be done within the statutory period of presentation of the declaration. Thus, if a taxpayer decides in the declaration of an exercise not to accept the freedom to amortize certain goods and / or rights, then he can not change that option with respect to that year. The foregoing does not prevent him from enjoying the benefit in the following years, although the freedom to pay covers the same assets and / or rights.