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Form 200. Corporate Income Tax Declaration 2018

4.2.23 Keys 00416 and 00543 application of the limit of Art. 11.12 LIS to the impairment losses of Art. 13.1 LIS and provisions and expenses (Art. 14.1) and 14.2) of the LIS)

Article 11.12 of the LIS establishes in its first paragraph that provisions for impairment of credits or other assets arising from possible insolvencies of debtors not related to the taxpayer, not owed by public law entities and whose deductibility does not occur by application of the provisions of article 13.1.a) of this Law, as well as those derived from the application of sections 1 and 2 of article 14 of this Law, corresponding to provisions or contributions to social security systems and, where appropriate, early retirement, which have generated deferred tax assets, to which the right established in article 130 of this Law applies, will be integrated into the tax base in accordance with the provisions of this Law, with the limit of 70 percent of the positive tax base prior to its integration, to the application of the capitalization reserve established in article 25 of this Law and to the compensation of negative tax bases.

In relation to the limit established in the first paragraph of article 11.12 of the LIS, the fifteenth additional provision of said Law establishes that, for tax periods beginning on or after January 1, 2016, taxpayers whose net turnover is at least 20 million euros during the 12 months prior to the date on which the tax period begins, will replace said limit with the following:

  • 50 percent, when in the referred 12 months the net amount of the turnover is at least 20 million euros but less than 60 million euros.

  • 25 percent, when the net turnover in the aforementioned 12 months is at least 60 million euros.

Likewise, with effect for the same period, the thirty-sixth transitional provision of the LIS establishes that for those taxpayers to whom the fifteenth Additional Provision of this regulation is not applicable, the limit established in article 11.12 of the LIS will be 60%.

Therefore, in cases where these provisions are included in the tax base because they are tax deductible and the limit provided for in article 11.12 of the LIS must be taken into account, the amount of the total amount of these provisions (which will have been entered in code [00211]) that exceeds the limit provided for in the positive tax base prior to its integration, the application of the capitalisation reserve established in article 25 of the LIS and the offsetting of negative tax bases will be recorded in code [00416].

In short, the key [00416] must show the difference between the amount entered in the key [00211] and the limit provided for in article 11.12 of the LIS.

Regarding the provisions that have not been integrated into the tax base in the tax period that were deductible for exceeding the limit established in the first paragraph of article 11.12 of the LIS, they must be integrated in the following immediate tax periods in the key [00543], also taking into account the same limit. For this purpose, the second paragraph of article 11.12 of the LIS establishes that the provisions corresponding to the oldest tax periods will be integrated first.

Law 48/2015, of October 29, on the General State Budget for the year 2016, modified, with effect for tax periods beginning on or after January 1, 2016, articles 11.12 and 130 of the LIS together with the thirty-third transitional provision of said law, to introduce new criteria for integration into the tax base of this type of allocations.

As a consequence of this reform, for tax periods starting on or after 1 January 2016, the third paragraph of article 11.12 of the LIS establishes that if in a tax period provisions have been made for impairment of credits or other assets derived from the possible insolvency of debtors not related to the taxpayer, not owed by public law entities and whose deductibility does not occur by application of the provisions of article 13.1.a) of this Law, as well as those derived from the application of sections 1 and 2 of article 14 of this Law, corresponding to provisions or contributions to social security systems and, where appropriate, early retirement, which have generated deferred tax assets, and the right established in article 130 of this Law is applicable only to a part of them, those provisions corresponding to the assets to which they are deductible will be integrated into the tax base, first of all. the aforementioned right does not apply.

Likewise, for tax periods beginning on or after January 1, 2016, article 130 and the thirty-third transitional provision of the LIS establish that the limit for the integration into the tax base of those non-deductible expenses at the time they are recorded and that generate deferred tax assets, established by article 11.12 of the LIS, will apply when in the tax period in which said assets were generated the net quota for said period is positive.

That is, in the tax period in which these expenses are deductible, the limit established in article 11.12 of the LIS for their integration into the tax base does not apply to those that generated deferred tax assets for an amount greater than the positive net quota, being integrated into the tax base, therefore, in the first place.