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Form 200. Corporate Income Tax Declaration 2019

11.9.1.3 Tax base

The tax base of the permanent establishment will be determined in accordance with the provisions of the general regime of the Corporate Tax Law, taking into account the existence of peculiarities in the formation of the tax base inherent to the Income Tax of non-Residents. The compensation regime for negative tax bases applies to the permanent establishment.

Among the specialties that permanent establishments must take into account to determine the tax base, the following should be noted, basically:

  • integration into the tax base of the difference between the normal market value and the book value of the assets assigned to a permanent establishment located in Spanish territory that ceases its activity or that transfers the assets assigned abroad.

  • application of the linkage rules for operations carried out by the permanent establishment with the head office or with other permanent establishments of the same head office or with other persons or entities linked to the head office or its permanent establishments, whether located in Spanish territory or abroad

  • deductibility of the part of the management and general administration expenses allocated by the head office to the permanent establishment, provided that they are reflected in the financial statements of the permanent establishment and are allocated in a continuous and rational manner. To determine these expenses, it is planned that taxpayers may request the Tax Administration to determine the valuation of the part of the management and general administration expenses that are deductible, in accordance with the provisions of article 18.9 of the Tax Law. on Companies.

  • Under no circumstances will the amounts corresponding to the cost of the entity's own capital assigned, directly or indirectly, to the permanent establishment be attributable.

It should be taken into account that the Non-Resident Income Tax Law establishes specific rules for determining the tax base for cases in which the operations carried out in Spain by a permanent establishment do not close a commercial cycle (section 3 of article 18). , or where the activity of the permanent establishment in Spain consists of construction, installation or assembly works whose duration exceeds six months (section 4 of article 18).