Normal mode

Regulations: Art. 14 of the LIS

The following expenses will be deductible under this concept:

• Those corresponding to environmental actions when they correspond to a plan formulated by the taxpayer and accepted by the tax authority.
• Expenses inherent to the risks derived from repair and overhaul guarantees will be deductible up to the amount necessary to determine a provision balance not exceeding the result of applying to sales with guarantees in force at the end of the tax period the percentage determined by the proportion in which the expenses incurred to meet the guarantees in the tax period and in the two previous ones were found in relation to the sales with guarantees made in said tax periods. 

This same rule will apply to provisions for covering incidental expenses due to sales returns.

Newly created entities may also deduct the provisions mentioned above for risks arising from repair and overhaul guarantees, by setting the percentage referred to therein, with respect to expenses and sales made in the tax periods that have elapsed.

The following expenses will not be deductible under the concept of provisions:

• Expenses for provisions and internal funds for the coverage of contingencies identical or similar to those that are the subject of the consolidated text of the Law on the Regulation of Pension Plans and Funds, approved by Royal Legislative Decree 1/2002, of November 29 (Art. 14.1 LIS).

  These expenses will be tax deductible in the tax period in which the benefits are paid. 

• Expenses relating to long-term staff remuneration through defined contribution or defined benefit systems (Art. 14.2 LIS ).

  However, contributions from promoters of pension plans regulated in the consolidated text of the Law on Regulation of Pension Plans and Funds, as well as those made to corporate social security plans, will be deductible. Contributions for the coverage of contingencies similar to those of pension plans will also be deductible. See the commentary on these contributions in this same Chapter under " Personnel expenses "

• The following expenses associated with provisions
  1. Those derived from implicit or tacit obligations.
  2. Those concerning the costs of fulfilling contracts that exceed the economic benefits expected to be received from them.
  3. Derivatives of restructuring, except if they refer to legal or contractual obligations and not merely tacit ones.
  4. Those relating to the risk of sales returns.
  5. Those of personnel that correspond to payments based on equity instruments, used as a formula for employee remuneration, and are paid in cash.

Note: Expenses that, in accordance with the two preceding sections, have not been tax deductible will be included in the tax base of the tax period in which the provision is applied or the expense is allocated to its purpose.