7.2.2 Breakdown of deductions for internal double taxation RDLeg. 4/2004

General considerations

For tax periods beginning on or after 1-1-2015, deductions cannot be generated to avoid internal double taxation, since the new Corporate Tax regulations establish a single exemption regime for dividends and capital gains derived from participations in the capital of both entities resident in Spanish territory and abroad.

However, in tax periods starting on or after 1 January 2015, such deductions generated in tax periods starting before 1-1-2015 may be applied, pending application in the first tax period starting from that date.

Therefore, in this section of "Deductions for internal double taxation RDLeg . 4/2004" which is included on page 15 of form 200, the amounts of said deductions that have been or may be transferred to future tax periods must be recorded.

Structure of this section

Column "pending deduction" . If the deduction is generated in any of the tax periods prior to the one being settled and started in 2008, 2009, 2010, 2011, 2012, 2013 or 2014, the balance of the corresponding deduction that was pending application at the beginning of the tax period being settled will be recorded in the respective key of this column, but taking into account that in any case said balance must be relative to the tax rate of the tax period in which the deduction was generated.

In column « tax rate generation period » the corresponding keys will be filled in, recording the tax rate that the taxpayer who is the beneficiary of the deduction paid in the tax period in which it was generated.

Column « 2018 pending deduction » will contain the amounts referring to pending deductions from previous years.

In the event that the tax rate applicable to the taxpayer benefiting from the deduction in the tax period in which it was generated is different from the tax rate that is paid in the tax period to be settled, the amount to be entered in this column will be the result of multiplying the amount in the corresponding key of the "Pending deduction" column by the fraction "tax rate 2018 /tax rate generation period".

For these purposes, section 4 of the twenty-third transitional provision of the LIS provides that the amount of the deductions established in this transitional provision and in articles 30, 31.1 b) and 32.3 of the RDLeg. 4/2004, will be determined taking into account the tax rate in force in the tax period in which it is applied.

If both types of tax are equal, the amount recorded in the “Pending deduction” column will be equal to that recorded in the corresponding code in the “ 2018 pending deduction” column.

Column «a applied in this settlement» aims to record the part (or all, if applicable) of the corresponding amount of column « 2018 pending deduction» that applies in the settlement of the tax period subject to declaration.

For these purposes, according to the provisions of section 2 of the Fifteenth Additional Provision of the LIS, in periods starting on or after January 1, 2016, for taxpayers whose net turnover is at least 20 million euros during the 12 months prior to the date on which the tax period begins, this amount may not exceed 50 percent of the taxpayer's total tax.

Column "pending application in future periods" will record the part of the deduction that, because it has not been applied in the settlement of the tax period being declared, remains pending application in future tax periods.