General Accounting

Amortisation of Goodwill.

In the New General Accounting Plan, Goodwill is not amortised, but instead, a mandatory procedure is established, consisting of determining its possible loss in value (in the event that the expected profits are not generated)

In taxation terms, article 12.6 of the previous Corporate Tax Law permitted the tax amortisation of Goodwill.

The new Corporate Tax Law (Law 28/2014 of 27/11/2014), DOES NOT consider the amortisation of Goodwill. Therefore, from 01/01/2015, Goodwill tax amortisation is NOT permitted.

Nonetheless, Temporary Provision 27 of that law establishes that in the event of acquisitions or restructuring operations prior to 01/01/2015, the tax amortisation will apply, provided certain requisites are met:

1.       The buyer must not be a natural person who is a resident or a non-resident.

2.       Both buyer and seller cannot be part of a group. Nonetheless, that requisite will not be necessary if the stake was purchased by non-related persons.

Consequently, if the acquisition was made before 01/01/2015 from a non-related, resident person, it is subject to Temporary Provision 27 of Law 27/2014. Therefore, tax amortisation of the Goodwill is possible.