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Form 200. Corporate Income Tax Declaration 2018

4.3.3.1 Amount to be compensated

The amount to be reflected in code [00547] will be the result of completing the section "Details of negative tax bases" on page 15 of form 200.

First of all, it should be noted that for tax periods starting on or after 1 January 2015, the offsetting of negative tax bases is permitted without any time limit (therefore, the maximum period of 18 years established by the previous regulations governing Corporate Tax is eliminated).

For these purposes, the twenty-first transitional provision of the LIS establishes a transitional regime according to which the negative tax bases pending compensation at the beginning of the first tax period that began on or after January 1, 2015, may be compensated in the following tax periods.

On the other hand, article 26.1 of the LIS establishes that negative tax bases that have been the subject of liquidation or self-assessment may be offset against positive income from subsequent tax periods up to a limit of 70 percent (60 percent for tax periods beginning in 2016, as established in the thirty-sixth transitional provision of the LIS) of the tax base prior to the application of the capitalization reserve established in article 25 of this regulation and its offset.

In any case, negative tax bases can be offset during the tax period up to an amount of 1 million euros. In the event that the tax period is less than a year long, the negative tax bases that may be offset in the tax period, as established in the previous paragraph, will be the result of multiplying 1 million euros by the proportion between the duration of the tax period and the year.

For tax periods starting on or after 1 January 2016, the fifteenth additional provision of the LIS establishes that 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 the limit established in article 26.1 of the LIS 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.

The limitation on the offsetting of negative tax bases will not apply to the amount of income corresponding to reductions resulting from an agreement with creditors not related to the taxpayer. Negative tax bases that are subject to offset against said income will not be taken into consideration with respect to the amount of 1 million euros referred to above.

These incomes corresponding to reductions or delays resulting from an agreement with creditors not linked to the taxpayer must be recorded in code [00545] on page 13 of form 200.

Likewise, for tax periods beginning on or after 1 January 2016, Royal Decree-Law 3/2016 of 2 December added section 8 to the sixteenth transitional provision of the LIS, according to which the limitation on the offsetting of negative tax bases shall not apply to the amount of income corresponding to the reversal of impairment losses included in the tax base by application of the provisions set out in the preceding sections of the aforementioned transitional provision, provided that the impairment losses deducted during the tax period in which the negative tax bases to be offset were generated represented at least 90 per cent of the deductible expenses for said period. If the entity has negative tax bases generated in several periods beginning before January 1, 2013, this requirement may be met by the aggregate calculation of all deductible expenses for said tax periods.

The amount of these incomes must be recorded in code [01509] on page 13 of form 200.

Consequently, and solely to determine the amount of key [00547] that will be affected by the application of the corresponding limitation established for the compensation of negative tax bases, the amount appearing in key [00545] and [01509] (keys [00593] and [01510] in the case of cooperative societies) will be subtracted from said key [00547].

The limit provided for in the first paragraph of article 26.1 of the LIS for the compensation of negative tax bases shall not apply in the tax period in which the entity is dissolved, unless it is the result of a restructuring operation to which the special tax regime established in Chapter VII of Title VII of this Law applies.

Nor will this limit apply in the case of newly created entities referred to in article 29.1 of the LIS, in the first 3 tax periods in which a positive tax base is generated prior to its offset.

However, negative tax bases may not be offset when the following circumstances occur:

  1. The majority of the share capital or the rights to participate in the results of the entity that has been acquired by a person or entity or by a group of related persons or entities, after the conclusion of the tax period to which the negative tax base corresponds.

  2. The persons or entities referred to in the previous paragraph had a participation of less than 25 percent at the time of the conclusion of the tax period to which the negative tax base corresponds.

  3. The acquired company finds itself in one of the following circumstances:

    1. Not carrying out any economic activity within the 3 months prior to the acquisition;

    2. It carried out an economic activity in the 2 years following the acquisition that was different or additional to that carried out previously, which in itself determined a net amount of turnover in those subsequent years greater than 50 percent of the average amount of the entity's turnover corresponding to the previous 2 years. A different or additional activity is deemed one that is assigned a different group to the previous one, according to the National Classification of Economic Activities.

    3. It is a patrimonial entity in the terms established in section 2 of article 5 of this Law.

    4. The entity has been removed from the index of entities pursuant to the provisions of letter b) of section 1 of article 119 of this Law.

Finally, article 26.5 of the LIS establishes that the right of the Administration to initiate the procedure for checking the negative tax bases compensated or pending compensation will expire 10 years after the day following the end of the period established for submitting the declaration or self-assessment corresponding to the tax period in which the right to compensation was generated.

After this period, the taxpayer must prove the negative tax bases that he/she intends to offset by exhibiting the liquidation or self-assessment and the accounting, with proof of their deposit during the aforementioned period in the Commercial Registry.