4.2.39 Codes 00363 and 00364 adjustments for the limitation on the deductibility of financial expenses (Article 16 LIS)

Article 16 of the LIS establishes a series of limits on the deductibility of financial expenses as detailed below. In relation to this article, we must take into account the Resolution of July 16, 2012 ( BOE of July 17) issued by the General Directorate of Taxes, in order to delimit the interpretative criteria in the application of the limitation on the deductibility of financial expenses regulated in the then current article 20 of RDLeg . 4/2004.

Net financial expenses will be deductible with a limit of 30 percent of the operating profit for the year.

For these purposes, the following must be taken into account:

• Net financial expenses will be understood as the excess of financial expenses with respect to the income derived from the transfer to third parties of own capital accrued in the tax period, excluding those expenses referred to in letters g), h) and j) of article 15. of the LIS.

• The operating profit will be determined from the operating result of the profit and loss account for the year determined in accordance with the Commercial Code and other development accounting regulations:

  • Eliminating the amortization of fixed assets, the allocation of subsidies for non-financial fixed assets and others, the deterioration and results from disposals of fixed assets, and

  • Adding the financial income from participations in equity instruments, provided that they correspond to dividends or participation in profits of entities in which, either the percentage of participation, direct or indirect, is at least 5 percent, or the value of acquisition of the participation is greater than 20 million euros, except that said participations have been acquired with debts whose financial expenses are not deductible by application of article 15 h) of the LIS.

When the net financial expenses of a tax period of one year do not exceed 1 million euros, these will be tax deductible without being subject to the limit of 30 percent of the operating profit for the year. And when the tax period has a duration of less than one year, the amount of net financial expenses deductible for tax purposes without said limit will be the result of multiplying 1 million euros by the proportion of the duration of the tax period with respect to the year.

The net financial expenses not deducted may be deducted in the following tax periods, together with those of the corresponding tax period, and with the limit of 30 percent referred to. In the event that the net financial expenses of the tax period do not reach said limit, the difference between this and the net financial expenses of the tax period will be added to the limit, with respect to the deduction of the net financial expenses in the tax periods ending in the 5 immediate and successive years, until said difference is deducted.

The same does not occur with respect to the amount of 1 million euros, to the extent that if the net financial expenses of a year do not reach said amount, the difference between 1 million euros and the net financial expenses deducted in the tax period is not may apply in future tax periods. However, the amount of 1 million euros can be reached with the net financial expenses of the tax period and with financial expenses pending deduction from previous tax periods up to said amount.

For the purposes of the provisions of article 16 of the LIS in relation to the limitation on the deductibility of financial expenses, section 5 of said article establishes that financial expenses derived from debts destined for the acquisition of shares in the capital or own funds of any type of entities will be deducted with the additional limit of 30 percent of the operating profit of the entity that made said acquisition, without including in said operating profit the corresponding to any entity that merges with it in the subsequent 4 years. to said acquisition, when the merger does not apply the special tax regime provided for in Chapter VII of Title VII of the LIS. These financial expenses will also be taken into account in the limit referred to in section 1 of this article.

The non-deductible financial expenses resulting from the application of the provisions of this section will be deductible in subsequent tax periods with the limit provided for in this section and in section 1 of this article.

The limit provided for in this section will not be applicable in the tax period in which the shares in the capital or own funds of entities are acquired if the acquisition is financed with debt, at a maximum of 70 percent of the acquisition price. Likewise, this limit will not apply in subsequent tax periods as long as the amount of that debt is reduced, from the moment of acquisition, at least in the proportional part that corresponds to each of the following 8 years, until the debt reaches 30 percent of the acquisition price.

The net financial expenses imputed to the partners of the entities that pay taxes in accordance with the provisions of article 43 of the LIS will be taken into account by them for the purposes of applying the aforementioned limit and will not be deductible by the entity that generated them. .

The limitation on the deductibility of financial expenses will not apply:

1. To credit institutions and insurance companies in the terms established in article 16.6 of the LIS.

   For these purposes, those entities whose voting rights correspond, directly or indirectly, entirely to them, and whose sole activity consists of the issuance and placement on the market of financial instruments to reinforce regulatory capital and the financing of such entities.

   Mortgage securitization funds, regulated in Law 19/1992, of July 7, on the Regime of Real Estate Investment Companies and Funds and on Mortgage Securitization Funds, and asset securitization funds will also receive the same treatment. referred to in Additional Provision fifth.2 of Law 3/1994, of April 14, which adapts Spanish legislation on credit to the Second Banking Coordination Directive and introduces other modifications related to the financial system.

2. In the tax period in which the entity is extinguished, unless it is the result of a restructuring operation.

In accordance with all of the above, in the code [00363] (increases), completing, where appropriate, its corresponding breakdown boxes, the amount of the financial expenses of the tax period, which are not tax deductible in the same, must be included. .

And in subsequent tax periods, when the tax deduction of financial expenses pending practice is applied, they will be integrated into the key [00364] or the equivalent at the time, of reduction, completing, where appropriate, their corresponding breakdown boxes.