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Form 200. Corporate Income Tax Declaration 2019

4.2.2 Codes 00357 and 00358 installment operations (Article 11.4 LIS)

article 11.4 of the LIS establishes that in the case of operations in installments or with a deferred price, whose consideration is payable, in whole or in part, through successive payments or through a single payment, as long as the period elapsed between the accrual and the expiration of the last or only installment is greater than one year, taxpayers can choose to:

  • Allocate all of the corresponding income to the period in which it was accrued (accrual criterion).

  • Allocate the aforementioned income proportionally to the extent that the corresponding charges are payable (criterion of chargeability of charges).

In the event that the endorsement, discount or advance collection of the deferred amounts occurs, the income pending imputation will be deemed to have been obtained at that time.

In application of the above, in the codes [00357] and [00358] "Instalment transactions (art. 11.4 LIS)" on page 12 of form 200 and, where appropriate, in their corresponding breakdown boxes, the positive or negative differences that arise between the profits recorded in the profit and loss account of the year being declared and the amounts that are taxable for such concepts, referring to installment operations, or with deferred price, with respect to which the taxpayer would have opted for a temporary imputation criterion for tax purposes different from that applicable under the accounting standards.

Furthermore, article 11.4 of the LIS establishes that the impairment in value of credits will not be tax deductible with respect to the amount that has not been included in the tax base by application of the criterion on installment transactions established in this section. until this is done

According to the provisions of the previous paragraph, in the event that the taxpayer has chosen to integrate into the tax base the income generated proportionally as the collections become payable, if upon expiration of the period to collect the deferred amount it is not collected, Said income must be integrated into the tax base regardless of collection, with the part of the impairment that has been recorded also being deductible in the part that corresponds to that uncollected amount.

Therefore, since the tax deductibility of the deterioration in value of the credits generated by term operations is deferred until the moment in which the income is integrated into the tax base, in application of this principle the taxpayer must carry out the adjustments to the accounting result that may be appropriate.