4.2.20 Keys 01518 and 00394 adjustments for impairment of securities representing equity interests or equity (DT 16ª.1 and 2 LIS)

Sections 1 and 2 of the sixteenth transitional provision of the LIS contain a transitional regime in relation to the reversal of impairment losses on securities representing participation in the capital or equity of entities, generated in tax periods beginning before 1 January 2013.

For these purposes, section 1 of said provision establishes that the reversal of losses due to impairment of securities representing participation in the capital or equity of entities that were tax deductible in tax periods beginning before January 1, 2013 in accordance with the provisions of article 12.3 of RDLeg . 4/2004, regardless of its accounting entry in the profit and loss account, will be included in the tax base of the period in which the value of the equity at the end of the financial year exceeds that at the beginning, in proportion to its participation, taking into account the contributions or returns of contributions made in it, within the limit of said excess.

Therefore, if the value is recovered, the taxpayer must make a positive adjustment to the accounting result in the tax period in which the reversal of the aforementioned difference occurs, recording said amount in key [01518]. Likewise, the taxpayer must proceed in the same way with respect to the integration into the tax base of the aforementioned impairment losses, for the amount of dividends or profit shares received from the participating entities, except when said distribution does not have the status of accounting income.

Finally, it should be noted that the corrections established in this section cannot be made with respect to those losses due to impairment in the value of the participation that are determined by the distribution of dividends or shares in profits and that have not given rise to the application of the deduction for internal double taxation or that the aforementioned losses have not been tax deductible within the scope of the deduction for international double taxation.

Likewise, section 2 of the sixteenth transitional provision of the LIS establishes that the reversal of losses due to impairment of securities representing participation in the capital or equity of entities listed on a regulated market to which article 12.3 of the RDLeg has not been applied. 4/2004, in tax periods beginning before 1 January 2013, it will be included in the taxable base of the Corporate Tax for the tax period in which its value is recovered in the accounting field.

For these purposes, if the value is recovered, the taxpayer must make a positive adjustment to the accounting result, recording the amount of said recovery in key [01518].