Non deductible expenses

Non-deductible expenses include:

• Those that represent a return on equity

• Fines and penal and administrative sanctions, urgency charges and surcharges for late filing of returns/assessment and self-assessments.

• Gambling losses

• Donations and generosity

  Donations and gratuities are not considered expenses for public relations with clients or suppliers, nor those made in accordance with customs and practices with respect to the company's personnel, nor those made to promote, directly or indirectly, the sale of goods and provision of services, nor those that are correlated with income. However, these expenses are subject to a limit of 1% of the net amount of turnover for the tax period.

• Expenses of activities contrary to the legal system.

• Service expenses corresponding to operations carried out, directly or indirectly, with persons or entities resident in countries or territories that are considered non-cooperative jurisdictions or that are paid through persons or entities resident in the same, unless it is proven that the expense corresponds to an operation or transaction actually carried out.

• Financial expenses accrued in the tax period, derived from debts with group entities according to the criteria established in article 42 of the Commercial Code, regardless of residence and the obligation to prepare consolidated annual accounts, intended for the acquisition, from other group entities, of shares in the capital or equity of any type of entities, or for the realization of contributions in the capital or equity of other group entities, unless the taxpayer proves that there are valid economic reasons for carrying out said operations.

• Contributions to Social Security Mutual Societies made by the entrepreneur or professional himself, without prejudice to the fact that they may be subject to a reduction in the general part of the tax base.

• Expenses corresponding to operations carried out with related persons or entities that, as a result of a different tax classification in these, do not generate income or generate income that is exempt or subject to a nominal tax rate of less than 10%.

• Personnel expenses corresponding to compensation arising from the termination of the employment relationship, common or special, or the commercial relationship, of administrators or members of the Boards of Directors, of the Boards that act in their place and other members of other representative bodies, occurring since January 1, 2013, when they exceed, for each recipient, the highest of the following amounts.

  1. 1,000,000 euros.

  2. The amount established as mandatory in the Workers' Statute for dismissal or termination.