Losses due to credit impairment due to possible insolvencies of debtors
Regulations: Art. 104 LIS
In addition to the individualized losses due to impairment of credits due to debtor insolvencies referred to in article 13.1 of the LIS , owners of economic activities whose net performance is determined using the direct estimation method, in either of its two modalities, may deduct the impairment loss on the balance of debtors not affected by the individualized provision in accordance with the following requirements:
That the economic activity has the tax consideration of a small company in the year in which the loss is deducted.
That the loss due to impairment of credits due to possible insolvencies of debtors does not exceed the limit of 1 percent of those existing at the conclusion of the tax period.
For these purposes, the following debtors will not be included:
Debtors for whom the loss due to impairment of credits due to insolvencies established in article 13.1 of the LIS had been recognized individually.
Debtors whose impairment losses are not deductible in accordance with the provisions of article 13.1 of the LIS . In accordance with the aforementioned article, in the case of small entities the following losses due to credit impairment are not deductible:
Those corresponding to credits owed by public law entities, unless they are the subject of an arbitration or judicial procedure regarding their existence or amount.
Those corresponding to credits owed by related persons or entities, unless they are in bankruptcy and the liquidation phase has been opened by the judge, in the terms established in Law 22/2003, of July 9, Bankruptcy. and, since September 1, 2020, in Royal Legislative Decree 1/2020, of May 5, which approves the consolidated text of the Bankruptcy Law.
You can consult, for purely informative purposes, the table of correspondence of the precepts of Law 22/2003, of July 9, Bankruptcy, with those of the consolidated text of the Bankruptcy Law, approved by Royal Legislative Decree 1/2020, of 5 May, by virtue of the third Additional Provision of the same, through the website of the Ministries of Justice and of Economic Affairs and Digital Transformation .
Note: Please note that article 14 of Royal Decree-Law 35/2020, of December 22, on urgent measures to support the tourism, hospitality and commerce sector and tax matters (BOE of 23) reduces from six to three months the period that must elapse from the expiration of the obligation, in order to be able to deduct in the years 2020 and 2021 the individual losses due to deterioration of credits derived from the possible insolvencies of debtors referred to in article 13.1 of the LIS .
Special case: loss of consideration as a small company
In periods in which the economic activity no longer meets the conditions to be considered a small company, losses due to impairment of credits due to possible insolvencies of debtors will not be tax deductible until they exceed the amount of the global loss allocated in the periods in which economic activity had such consideration.
Note: Keep in mind that small companies that reach or exceed a turnover of 10 million euros in a tax period may continue to apply the tax incentives of their special tax regime during the three tax periods immediately following that one, provided that have met the conditions to be considered as small in size both in that period (in which it reaches or exceeds the limit of 10 million) and in the two tax periods prior to the latter.