As is known, already in the income campaign last year and especially after the publication of various binding consultations prior to it (V3404-19, V3410-19, ...) the Administration presented its criteria on the treatment conferred on the expense for amortization of the income from real estate capital (basically rentals) derived from properties acquired by succession or donation.

The matter is economically important. To be understood: it is a matter of deciding whether a construction that has been declared (and settled) in an inheritance or in a donation, for € 200,000 is amortized:

• at 3% of said amount plus the sum of the tax paid for inheritance and donations (ISD), the IIVTNU, notary and registration expenses borne (that is, a minimum expense of € 6,000 is obtained)
• or only 3% on the sum of the inheritance and donation tax (ISD), the IIVTNU, notary and registration expenses (which in the previous example for comparison purposes would represent an expense of € 0).

On a value of € 200,000, there will be € 6,000 of annual expense or € 0 of annual expense. This is the question.

And the decision to adopt is further complicated by the imminence of the new rental campaign and the requirements that the Treasury is sending to taxpayers in relation to their income tax 2019, denying them the deductibility of the amortization expense in real estate leases and making the corresponding settlements .

And it is that:

• On the one hand, it is still waiting for the Supreme Court to resolve the appeal it has raised in this regard (R. 5664/2019).
• on the other, the Administration is, as we have said, inspecting and checking that its criteria is adopted
• and on the other, resolutions of different economic-administrative courts appear against the criteria of the Administration.

It should be noted in this last point, that it is no longer about decisions and judgments of courts of the jurisdictional order. These are resolutions of bodies integrated into the Ministry of Finance itself, that is, administrative figures that reject the criterion of the administration of taxes itself.

Thus, the resolutions of June 30, 2020 and November 26, 2020 of the Economic-Administrative Court of Valencia and of December 11, 2020 of the Economic-Administrative Court of Andalusia admit the resources of taxpayers.

Among other arguments, the TEAR of Valencia, in the absence of a specific rule applicable to lucrative acquisitions, makes a systematic interpretation that by reference to the category of capital gains and losses concludes that the basis for determining the amortization expense of the rented property and acquired for profit must coincide with the value given for the purposes of the ISD, plus the tax and acquisition costs, as well as the provisions that quantify the patrimonial changes in the personal income tax of goods that were not acquired onerously and that the Treasury does admit as cost of acquisition for its calculation -in direct application of article 36 of the Personal Income Tax Law-.

And its forcefulness is such that among the qualifications that the court makes to the criterion maintained by the tax administration, it describes that it "starts from several unfounded assumptions" or that it "falls into extreme literalism."

For its part, the TEAR of Andalusia alludes as a criterion to the rules that quantify depreciation in cases where real estate generates income from economic activities, which, by reference to accounting regulations (via Corporation Tax), admit as the basis of the amortization of a property or asset acquired profitably the fair value, that is, its market value, which coincides with that established by the ISD, and which in turn admits for personal income tax on economic activities the General Directorate of Taxes itself (like this in your queries V3195-16 and V2386-20).

Obviously, the interpretation of the analyzed TEARs compares the taxation of income from real estate capital, economic activities or capital gains for interpretative purposes; but the fact is that even though they are all different compartments, they all belong to the same tax: personal income tax.

Really, a shame this Administration of ours, that instead of informing, advising and contrasting its criteria with that of the Courts before starting any campaign, threatens with checks those who do not follow its criteria, marked by itself, under the threat of liquidations and verifications that even if it is only to avoid the inconvenience, expenses and complications that they entail, many taxpayers will prefer to avoid, momentarily accepting, the designs of who should pursue other actions, and not those merely interpretive and discussed even by bodies and courts of their own administration.