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Form 200. Corporate Income Tax Declaration 2018

4.2.2 Codes 00357 and 00358 installment transactions (Art. 11.4 LIS)

Article 11.4 of the LIS establishes that in the case of installment or deferred price transactions, the consideration for which is payable, in whole or in part, through successive payments or through a single payment, provided that the period between the accrual and the due date of the last or only installment is greater than one year, taxpayers may choose to:

  • Allocate all the corresponding income to the period in which it was accrued (accrual criterion).

  • Allocate the aforementioned income proportionally as the corresponding payments become due (criterion on the demandability of payments).

In the event of an endorsement, discount or advance collection of the deferred amounts, the income pending imputation will be deemed to have been obtained at that time.

In application of the above, in keys [00357] and [00358] "Installment transactions (art. 11.4 LIS)" on page 12 of form 200, the positive or negative differences that arise between the profits recorded in the profit and loss account for the year being declared and the amounts that are tax-accountable for such concepts, relating to installment transactions, or deferred price transactions, for which the taxpayer has opted for a temporary imputation criterion for tax purposes different from that applicable under accounting rules, must be recorded.

Furthermore, article 11.4 of the LIS establishes that the impairment of the value of credits will not be tax deductible with respect to that amount that has not been integrated into the tax base by applying the criterion on installment transactions established in this section, until this is carried out.

According to the provisions of the previous paragraph, in the event that the taxpayer has chosen to integrate into the tax base the income generated proportionally as the collections become due, if when the deadline for collecting the deferred amount expires and it is not collected, said income must be integrated into the tax base independently of the collection, and the part of the impairment of value that has been recorded will also be deductible, in the part that corresponds to that uncollected amount.

Therefore, since the tax deductibility of the impairment of the value of credits generated by term transactions is deferred until the moment in which the income is integrated into the tax base, in application of this principle the taxpayer must make the appropriate adjustments to the accounting result in these keys.