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Form 200. Corporate Income Tax Declaration 2018

4.2.4 Keys 00225 and 00226 negative income (Art. 11.9, and 11.10 LIS)

These keys will contain the differences in temporary imputation derived from the application of article 11.9 and 10 of the LIS :

Article 11.9 of the LIS establishes that negative income generated in the transfer of elements of tangible assets, real estate investments, intangible assets and securities representing debt when the acquirer is an entity of the same group of companies according to the criteria established in article 42 of the Commercial Code, regardless of residence and the obligation to prepare consolidated annual accounts regulated by article 11.9 of the LIS. Pursuant to this article, the negative income generated in these operations will be imputed in the tax period in which said assets are written off the balance sheet of the acquiring entity, are transferred to third parties outside the aforementioned group of companies, or when the transferring entity or the acquiring entity cease to be part of the same. However, in the case of amortizable assets, negative income will be integrated, prior to said circumstances, in the tax periods that remain of the useful life of the transferred assets, depending on the amortization method used with respect to the aforementioned assets.

Article 11.10 of the LIS establishes that negative income derived from the transfer of securities representing participation in the capital or equity of entities, when the acquirer is an entity of the same group of companies according to the criteria established in the Article 42 of the Commercial Code, regardless of residence and the obligation to prepare consolidated annual accounts, will be allocated in the tax period in which said assets are transferred to third parties outside the aforementioned group of companies, or when the transferring entity or the acquirer cease to be part of it, reduced by the amount of the positive income obtained in said transfer to third parties, provided that, with respect to the values transferred, the following circumstances occur:

  • that, at no time during the year prior to the day on which the transmission occurs, the requirement established in article 21.1 a) of the LIS is met, and

  • that, in the case of participation in the capital or equity of entities not resident in Spanish territory, in the tax period in which the transfer occurs, the requirement established in article 21.1 b) of the LIS is met.

The provisions of article 11.10 of the LIS shall apply to the case of the transfer of shares in a temporary joint venture or in forms of collaboration similar to these located abroad, but not to the extinction of the participating entity, unless this is the result of a restructuring operation or the activity continues to be carried out under any other legal form.

Therefore, in the tax period in which the transfer of the assets or values referred to in article 11.9 and 10 of the LIS is carried out, the transferring entity must enter in code [00225] of increases, the amount of negative income generated by said transfer that is not deductible for tax purposes. When in subsequent tax periods, the acquiring entity with respect to said assets, those derecognised from the balance sheet of the acquiring entity, transfers them to third parties outside the aforementioned group of companies, or when the transferring entity or the acquiring entity ceases to form part of it, the acquiring entity will integrate the amount of these negative income into its tax base through a negative adjustment that will be included in the reductions key [00226].