4.2.6 Keys 00361 and 00362 other differences in temporary allocation of income and expenses (Art. 11 LIS)

These keys will include the adjustments required in the following cases:

• If an expense is recorded in the profit and loss account or in a reserve account in a tax period prior to its fiscal accrual, the necessary adjustment must be made so that it is not recorded in that period, but in the accrual period.

  Therefore, if this expense has been recorded in the profit and loss account, a correction for increases must be made in key [00361]. However, if the expense has been recorded in a reserve account, the tax base will not have to be increased since its amount is not included in the accounting result. Likewise, in the tax period in which the accrual of said expense occurs, a correction for decrease in key [00362] must be made, regardless of the account in which it was recorded.

• Income allocated to the profit and loss account or to a reserve account in a tax period prior to its tax accrual shall be allocated for tax purposes in the tax period corresponding to its accounting allocation, provided that this does not result in lower taxation than that which would have been applicable by application of the general rules on temporary allocation.

  In this case, if the income has been recorded in the profit and loss account, no adjustment will have to be made. However, if said income has been recorded in a reserve account, a correction for increases in key [00361] must be made in the tax period in which it has been recorded.

• Expenses that are recorded in the profit and loss account or in a reserve account in a tax period after their accrual will be recorded for tax purposes in the tax period corresponding to their accounting allocation, provided that this does not result in lower taxation than that which would have been applicable by application of the general rules on temporary allocation.

  In this case, if the expense has been recorded in the profit and loss account, no adjustment will have to be made. However, if said expense has been recorded in a reserve account, a correction for decrease in key [00361] must be made in the tax period in which it has been recorded.

• Revenue that has been recorded in the profit and loss account or in a reserve account in a year after its fiscal accrual will give rise to a correction for decreases in key [00362] only when it has been recorded in the profit and loss account in the year of its accounting. However, if such income has been recorded in a reserve account, the tax base will not have to be reduced, since its amount is not included in the accounting result.

  Likewise, in the tax period of its fiscal accrual, which will be prior to that of its accounting, a correction will have to be made for increases in key [00361], regardless of the account in which they were recorded.

These keys will also include other corrections generated by temporary imputation differences that do not fit into specific keys created in form 200.

Thus, article 11.5 of the LIS establishes that the reversal of expenses that have not been tax deductible will not be included in the tax base.

Article 11.7 of the LIS establishes that when provisions are eliminated because they have not been applied to their purpose, without crediting an income account for the year, their amount will be included in the taxable base of the entity that provided them, to the extent that said provision would have been considered a deductible expense.

Finally, article 11.8 of the LIS establishes that when the entity is a beneficiary or has been granted the right to redeem life insurance contracts in which it also assumes the investment risk, it will in all cases include in the tax base the difference between the liquidation value of the assets affected by the policy at the end and at the beginning of each tax period.

The provisions of this section shall not apply to insurance policies that implement pension commitments assumed by companies under the terms set forth in the First Additional Provision of the Revised Text of the Law on Regulation of Pension Plans and Funds, approved by Royal Legislative Decree 1/2002, of November 29, and in its implementing regulations.

The amount of imputed income will reduce the income derived from the receipt of amounts from the contracts.

Therefore, in relation to the provisions of these precepts, the taxpayer must make in keys [00361] and [00362], the adjustments generated by the non-integration in the tax base of the reversal of expenses that have not been fiscally deductible, as established in article 11.5 of the LIS, or when provisions are eliminated because their purpose is not applied according to the provisions of article 11.7 of the LIS, or when the entity is a beneficiary or has been recognized the right to redeem life insurance contracts in which, in addition, it assumes the investment risk, in the terms established by article 11.8 of the LIS.