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Practical Income Manual 2019.

Subject

Regulations: Art. 101 LIS

In general

For the purposes of applying the tax benefits discussed in this section, small companies in 2019 are considered to be those in which the net amount of the turnover in the immediately preceding tax period (2018 financial year) was less than 10 million euros, whatever the net amount of the turnover in the financial year itself.

Special rules

  • When the company was newly created, the net amount of the turnover will refer to the first tax period in which the activity is actually carried out, said figure increasing proportionally to the year if the period of exercise had been less than 12 months.
  • If the immediately preceding tax period had lasted less than one year, or the activity had been carried out for a shorter period, the net amount of the turnover will increase proportionally to the year.
  • Group companies: in the event that a natural person, alone or jointly with the spouse or other natural persons united by ties of kinship in a direct or collateral line, consanguineous or by affinity, up to the second degree inclusive, is in relation to the entities of those who are partners in any of the cases referred to in article 42 of the Commercial Code, regardless of the residence of the entities and the obligation to prepare consolidated annual accounts, the net amount of the turnover will refer to all the entities or companies belonging to said group, taking into account the eliminations and incorporations that correspond by application of accounting regulations.
  • In the event that the same natural person carries out several economic activities, the net amount of the turnover will refer to all the activities carried out.
  • Entities under income allocation regime: The net amount of the turnover will be determined taking into account exclusively the set of economic activities carried out by said entities.