4.2.25 Codes 00337 and 00338 other non-tax deductible provisions (Art. 14 LIS) not affected by Art. 11.12 LIS

Article 14.2 of LIS establishes that expenses related to long-term remuneration of personnel through defined contribution or defined benefit systems will not be deductible.

However, contributions to cover contingencies similar to those of pension plans will be deductible, the contributions made by the promoting companies provided for in Directive 2003/41/EC of the European Parliament and of the Council, of June 3, 2003. , provided they meet the requirements set forth in article 14.2 of the LIS.

Likewise, article 14.3 of the LIS establishes the non-deductibility of other expenses associated with provisions:

1. Those derived from implicit or tacit obligations.

2. Those concerning the costs of compliance with contracts that exceed the economic benefits expected to be received from them.

3. Those derived from restructuring, except if they refer to legal or contractual obligations and not merely tacit ones.

4. Those related to the risk of sales returns.

5. Personnel payments that correspond to payments based on equity instruments, used as a remuneration formula for employees, and are paid in cash.

Finally, article 14.4 of the LIS establishes the deductibility of expenses corresponding to environmental actions, as long as they correspond to a plan formulated by the taxpayer and accepted by the Tax Administration.

However, according to the provisions of article 14.5 of the LIS, these expenses are not deductible, either because this is what the regulations establish. or because they have not complied with the requirements of the standard, they will be deductible in the tax period in which the provision is applied or the expense is used for its purpose.

Therefore, this difference between the accounting criteria and the tax criteria on the deductibility of these expenses gives rise to the following adjustments in the keys [00337] and [00338] «Other provisions not tax deductible (art. 14 LIS) not affected by art. 11.12 LIS» on page 12 of model 200:

• In the tax period in which non-tax-deductible expenses are recorded, the taxpayer must include their amount in the key [00337] of increases to the result of the profit and loss account.

• And in the tax period in which the provision is applied to its purpose, the taxpayer must include in the reductions key [00338] the amount corresponding to said expenses.

In addition to the expenses and provisions mentioned in the previous sections, article 14.7 of the LIS establishes that expenses related to technical provisions made by insurance entities will be deductible up to the amount of the minimum amounts established by the applicable regulations. With this same limit, the amount of the provision in the year to the stabilization reserve will be deductible in the determination of the tax base, even when it has not been integrated into the profit and loss account. Any application of said reserve will be integrated into the tax base of the tax period in which it occurs.

In application of this precept, the amount of the expenses related to the technical provisions made by the insurance entities must be entered in code [00337], as well as the amount of the allocation in the year to the stabilization reserve, which exceeds the limit of the minimum amounts established by the applicable regulations. Likewise, in the tax period in which insurance entities apply said reserve, they must enter its amount in code [00338].

In the event that the amount of the allocation in the year to the stabilization reserve has not been integrated into the profit and loss account, it will be deductible with the aforementioned limit, so the amount of the endowment to the limit. In the tax period in which the application of said reserve occurs, that amount must be entered in key [00337].

Finally, article 14.9 of the LIS establishes that the expenses inherent to the risks derived from repair and revision guarantees will be deductible up to the amount necessary to determine a balance of the provision not greater than the result of applying to sales with live guarantees. At the conclusion of the tax period, the percentage determined by the proportion in which the expenses incurred to meet the guarantees in the tax period and in the two previous periods were found in relation to the sales with guarantees made in said tax periods.

The provisions of the previous paragraph will also apply to the provisions for the coverage of accessory expenses for sales returns regulated in article 14.3.d) of the LIS.

Therefore, taxpayers must make a positive adjustment in key [00337] for the amount of those expenses that are not deductible because they exceed the amount established in said provision.

In relation to these expenses for provisions of article 14 of the LIS, it should be remembered that both in the codes [00335] and [00336] «Expenses and provisions for pensions not affected by art. 11.12 LIS (arts. 14.1, 14.6 and 14.8 LIS)", as in codes [00337] and [00338] "Other non-tax deductible provisions (art. 14 LIS) not affected by art. 11.12 LIS", only the amounts related to said expenses that are not affected by the limit established in article 11.12 of the LIS must be entered. If they were affected by said limit, their amount would be entered in the codes [00415] and [00211] «Losses due to deterioration of art. 13.1 LIS and provisions and expenses (arts. 14.1 and 14.2 LIS) referred to in art. 11.12 and DT 33.1 LIS».