The tax deduction for investment in fixed assets, as well as being a technicality, is a door that many companies are leaving ajar, or closed, without even knowing it.
We are at a time when every euro counts, and this incentive can make the difference between an affordable investment and a missed opportunity.
Have you upgraded your machinery? Have you bought new equipment? Have you modernised in any way this year? Then you need to know about this. Because if you are not taking full advantage of the tax deduction for investment in fixed assets, you are leaving money on the table.
What is this tax deduction for investment?
The State (or rather, the Regional Treasury if you are in Navarre or the Basque Country) rewards you if you make the effort to invest in improving your business.
How? By allowing you to deduct 10% of that investment from your corporation tax.
In other words, if you invest €100,000, you can pay €10,000 less in taxes.
Now, the requirements:
- It has to be new. No buying used machinery.
- It has to be significant. Under the regional tax regime, the investment must represent at least 10% of the previous year’s assets.
- No subsidies. If you have received public aid for the purchase, that money is deducted from what you can deduct.
- And, of course, you have to declare corporation tax. If you are self-employed and pay tax on your actual income, this article is not for you.
Why this is not just a tax issue (it’s pure strategy)
This deduction is fuel for investing without fear.
It can be used to:
- Renew technology.
- Automate processes.
- Modernise your fleet.
- Improving your energy efficiency.
Can you imagine making investment decisions not just because «you have to», but because it makes financial sense? Exactly. This isn’t a quick fix, it’s a financial planning tool. What’s more, it can be combined with other deductions such as R&D&I. Yes, you can combine benefits.
That’s why, when we analyse a tax structure at Confianz, we don’t just look at what’s there. We look at what you could be doing and aren’t doing. Because that’s also saving money.
How to apply this
If all this sounds good but you’re not sure where to start, don’t worry: you’re not alone.
The tax deduction for investment in fixed assets has one enemy: administrative chaos. If you don’t document the purchase properly, if you can’t prove that it’s a new asset, if you can’t prove that you exceed the threshold, you lose the benefit. And worse, you could end up with a tax audit.
What do you need to have in order?
- Invoices, contracts, technical reports… Everything.
- The previous year’s balance sheet (to prove the % of investment).
- Proof that you have not received any subsidies for the purchase.
- And yes, declare it correctly on your corporation tax return.
Does it require work? Yes. But with an advisor who knows what they’re doing (hello, we’re Confianz), it becomes a manageable and profitable process. The important thing is to plan ahead.
Does this apply to any company?
Not for everyone, but for many more than those who apply it. The biggest beneficiaries are:
- Industrial companies that renew heavy machinery.
- Logistics companies that need to renew vehicles.
- Agri-food companies that automate processes.
- Technology companies investing in new infrastructure.
Many SMEs that make small investments can also benefit. They just need to exceed 10% of their previous assets. That’s why it’s so important to analyse the right time to invest. If you plan well, you can make a strategic purchase that triggers the deduction.
Are you investing in your business? Then don’t do it blindly.
Let’s talk. We can help you get the most out of every euro you invest in your growth.