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Form 200. Corporate Income Tax Declaration 2018

4.3.3.3 Breakdown of negative bases: Detail of the compensation of negative tax bases

For tax periods beginning on or after 1 January 2015, taxpayers may offset negative tax bases with positive income from subsequent tax periods without any time limit (the maximum period of 18 years established by the previous regulations governing Corporate Tax is therefore eliminated).

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 preceding paragraph would have 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.

Furthermore, section 5 of article 26 of the LIS establishes that: The right of the Administration to initiate the procedure for checking the negative tax bases that have been compensated or are 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.

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.

Entities covered by the special tax regime SOCIMI and entities applying the tax regime for exiting the special SOCIMI tax regime (section 2 of article 12 of Law 11/2009) may offset negative tax bases in accordance with the specific rules applicable to their regime.

IMPORTANT:

Cooperative societies will not be able to record any item in this field as compensation for losses, since the specific tax regime for such entities replaces said compensation of negative bases with that of negative quotas.

The compensation of the mentioned negative quotas will be carried out through field [00561] following the instructions indicated in the corresponding help of the screen “Settlement (I) and (II) part 2”

Note: Note common to keys [00550] and [00547]

If the amount of the code [00550] is zero or negative, in no case may any amount of the negative tax bases of previous tax periods be offset, and the figure zero ("0") must be entered in the code [00547].

If the amount of key [00550] is positive, the amount of key [00547] will be limited to that of key [00550] (1) That is, the application of key [00547] may not result in a negative amount in key [00552] (taxable base) under any circumstances.

In relation to SOCIMI entities, entities that opt for the special SOCIMI regime that pays tax at a 0% rate, in the event that negative tax bases are generated, the mechanism for offsetting bases provided for in article 26 of the LIS will not apply. This indication is only applicable to the tax base to which the 0% rate is applicable. If there were positive incomes that were taxed in accordance with the general regime and the general tax rate, the mechanism for compensating bases provided for in article 26 of the LIS would apply to said incomes.

Assumption of decreases in the result of the profit and loss account relating to the concepts "Mining and hydrocarbons, depletion factor" (key [00382])], "Reserve for investments in the Canary Islands" (key [00404] and "Application of the limit of art. 11.12 LIS to impairment losses of art. 13.1 LIS and provisions and expenses of art. 14.1. and 14.2) LIS" (key [00416]).

In calculating the amount of key [00550], ([00550] = [00501] + [00417] - [00418]) mentioned above in relation to said key, the following must be taken into account in relation to keys [00382] and [00404]:

If the operation: key [00501] + (keys [00355] to [00413]) (2) - (keys [00356] to [00414]) (2) , excluding from these the keys [00382] and [00404] results in zero or a negative amount, the application of the decreases to the result of the profit and loss account referred to in the keys [00382] and [00404] will not proceed in any case; That is, in the aforementioned calculation of key [00550] the amounts of keys [00382] and [00404] will not be computed to obtain the amount of key [00418]. And in this case, negative tax bases from previous tax periods cannot be offset, so the number zero ("0") must be entered in key [00547].

If, on the other hand, the result of such an operation is a positive amount, the decreases to the profit and loss account result referred to in keys [00382] and/or [00404] will be applied in order to obtain the amount corresponding to key [00550], but taking into account that the application of said decreases (of keys [00382] and [00404]), considered individually and/or as a whole, may in no case give rise to a negative tax base (key [00552]).

(1) For entities subject to a tonnage-based taxation regime, the limit is different (see case).(Back)

(2) Keys to the columns Increases and Decreases, respectively, of the section "Details of corrections to the profit and loss account result (excluding the correction of IS )", on pages 12 and 13 of form 200. (Back)