Temporary negative adjustments originating in previous years
In the event that the taxpayer has to make a correction to the result of the Profit and Loss Account that involves a temporary negative correction originating in previous years, when filling in the corresponding box on pages 12 and 13, the breakdown table "Details of corrections to the result of the profit and loss account (excluding the correction for Corporate Tax)" on page 19 of form 200 will be displayed simultaneously on the Corporate Web form. This information, once completed, will be grouped in the detail table contained on pages 26 bis to 26 sexies of form 200.
In this case, the box corresponding to temporary correction decreases originating in previous years in the section of the table dedicated to Corrections for the year must be completed.
Likewise, the box for Future decreases of temporary corrections must be completed in the columns corresponding to " Outstanding balance at the beginning of the year" and " Outstanding balance at the end of the year" because the positive adjustment at source reverses through negative extra-accounting adjustments, which entails future decreases in the tax base. As for box Future decreases in column " Outstanding balance at beginning of fiscal year" , it must be filled in for the same amount was entered in box Future decrease in column " Outstanding balance at end of fiscal year" of the settlement for the previous tax period. On the other hand, regarding the column " Outstanding balance at the end of the fiscal year" the box for future decreases must be completed. The balance in this box will decrease until it reaches zero, when the total amount has been reversed.
For all the above, during the tax periods in which the Correction reverses because it originates in previous years, in the part of the table corresponding to the " Outstanding balance at the end of the year" , the box for Future decreases of Temporary corrections will decrease its value with respect to the Balance of the previous year by the amount of the negative correction for this year . For these purposes, the " Outstanding balance at the end of the year" will reflect the total amount pending reversal in subsequent years . Since this balance is included in the future decreases section, it indicates that this amount is reversing through negative extra-accounting adjustments.
Example:
Starting from the example presented in the case of a positive temporary correction originating in the fiscal year, we continue with the years 2022 to 2028.
Company “C” has acquired new machinery for an amount of 200,000 euros. The acquisition takes place on January 1, 2020, date on which such elements are made available to Company "C" and become operational. The financial year of Company "C" coincides with the calendar year. The residual value of the items is estimated to be insignificant, so the amortizable value coincides with the acquisition price.
The accounting provision for amortization is made by applying a coefficient of 50 percent, which the company estimates as effective depreciation of such elements. Company "C" decides to depreciate the machinery for tax purposes according to the table contained in art. 12.1.a) of the LIS , that is, it will apply a coefficient of 12 percent.
In application of the provisions of art. 12.1 of the LIS, the following adjustments must be made in boxes [ ] and [00304] "Differences between accounting and tax amortization (art. 12.1 LIS)" on page 12 of form 200:
| Financial year | Accounting amortization | Tax amortization | Correction | Form 200 | Balance at the end of the year |
|---|---|---|---|---|---|
| 2020 | 200,000 x 50% = 100,000 | 200,000 x 12% = 24,000 | 76,000 | [00303] | -76,000.00 |
| 2021 | 200,000 x 50% = 100,000 | 200,000 x 12% = 24,000 | 76,000 | [00303] | -152,000.00 |
| 2022 | --- | 200,000 x 12% = 24,000 | -24,000 | [00304] | -128,000.00 |
| 2023 | --- | 200,000 x 12% = 24,000 | -24,000 | [00304] | -104,000.00 |
| 2024 | --- | 200,000 x 12% = 24,000 | -24,000 | [00304] | -80,000.00 |
| 2025 | --- | 200,000 x 12% = 24,000 | -24,000 | [00304] | -56,000.00 |
| 2026 | --- | 200,000 x 12% = 24,000 | -24,000 | [00304] | -32,000.00 |
| 2027 | --- | 200,000 x 12% = 24,000 | -24,000 | [00304] | -8,000.00 |
| 2028 | --- | 8.000 | -8.000 | [00304] | 0.00 |
Total tax amortization = 24,000 x 8 + 8,000 = 200,000
Total accounting depreciation = 100,000 + 100,000 = 200,000
The tax correction that Company "C" will make to determine the taxable base of the Corporate Tax corresponding to 2022 (which will be recorded in box [00304] ) will be the following:
| Accounting amortization | Tax amortization | Decrease in profit and loss account result |
|---|---|---|
| 0 | 200,000 x 12% = 24,000 | 24,000 |
In the financial year 2022 , the machinery is depreciated in the accounting records , therefore, a negative extra-accounting adjustment is generated which must be recorded in the box [00304] of decreases , as a consequence of the reversal of the positive adjustment , for the amount of the tax depreciation , that is, for a value of 24,000 euros. This is a Temporary negative correction originating from previous years .
In the Web Companies form, in the 2022 period, when box [00304] is to be filled in, the table on page 19 of form 200 will be displayed and the box for Decreases of « Temporary corrections originating in previous years» in the part of the table dedicated to « Corrections for the year» for an amount of 24,000 euros must be filled in. The form will transfer the completed information to box [02568] « Temporary with origin in previous years» on page 26 bis of form 200.
Likewise, the section corresponding to " Outstanding balance at the beginning of the year" must be completed in the table on page 19. Since we are dealing with a positive adjustment at source , the Future decreases box of Temporary corrections must be filled in for an amount of 152,000 euros since this is the value of the future decrease box in the column " Outstanding balance at the end of the year" of year 2021 , that is, the accumulated total for 2020 and 2021.
Regarding the part corresponding to " Outstanding balance at the end of the year" , since it is a positive adjustment at origin , the box for future decreases of Temporary corrections be completed for an amount of 128,000 euros (152,000 - 24,000) which is the outstanding balance at the beginning of the year reduced by the reversed amount of 24,000 euros in fiscal year 2022 . The form will transfer the completed information to box [02570] « Outstanding balance at the end of the fiscal year» on page 26 bis of form 200.
Detail of the corrections to the profit and loss account result (excluding the correction for IS ) (page 19 of form 200)
| Total | --- | 152,000 | --- | 24,000 | --- | 128,000 |
| Exercise 2022 tax corrections | Outstanding balance at beginning of fiscal year | Exercise corrections | Outstanding balance end of fiscal year | |||
|---|---|---|---|---|---|---|
| Future increases | Future decreases | Increases | Decreases | Future increases | Future decreases | |
| Permanent corrections | --- | --- | --- | --- | --- | --- |
| Temporary corrections with origin in the fiscal year |
--- | 152,000 | --- | --- | --- | 128,000 |
| Temporary corrections with origin in previous years |
--- | 24,000 | ||||
Table of details of corrections to the profit and loss account result (excluding the correction for IS) (page 26 bis to 26 sexies of form 200)
| Detail of settings | Type (2020) | Outstanding balance at the beginning of the fiscal year | Exercise corrections | Outstanding balance at the end of the fiscal year | ||||
|---|---|---|---|---|---|---|---|---|
| Permanent | Temporary (origin in the fiscal year) | Temporary (origin in previous exercises ) | ||||||
| Differences between accounting tax amortization (art. 12.1 LIS) |
INCREASE | --- | --- | --- | --- | --- | ||
| Differences between accounting tax amortization (art. 12.1 LIS) |
DECREASE | [02569] 152,000 | --- | --- | [02568] 24,000 | [02570] 128,000 | ||
In the years 2023 to 2027 , the adjustments will be the same as those set out for 2022, with the difference that the " Outstanding balance at the end of the year" , in the Future decreases box of Temporary corrections , its amount will decrease in each year at a rate of 24,000 euros each year, until reaching 8,000 euros in 2027.
In the fiscal year 2028 , in the Web Companies form, when filling out box [00304] the table on page 19 of form 200 will be displayed and you must fill out box Decreases of « Temporary corrections originating in previous fiscal years» of the part of the table dedicated to « Corrections for the fiscal year» for the amount of 8,000 euros , since this is the amount pending tax amortization . The form will transfer the completed information to box [02568] « Temporary with origin in previous years» on page 26 bis of form 200. On the other hand, regarding the part corresponding to " Outstanding balance at the end of the year" , the box for Future decreases of Temporary corrections for the amount of 0 euros (8,000 - 8,000) must be completed, since there is no outstanding balance due to the fact that in this year they have reversed the 8,000 euros that remained as an outstanding balance in 2027. The form will show 0 in box [02570] « Outstanding balance at the end of the year» on page 26 bis of form 200.
Detail of corrections to the profit and loss account result (excluding the correction for IS) (page 19 of form 200)
| Total | --- | 8.000 | --- | 8.000 | --- | --- |
|
Exercise 2028 | Outstanding balance at beginning of fiscal year | Exercise corrections | Outstanding balance end of fiscal year | |||
|---|---|---|---|---|---|---|
| Future increases | Future decreases | Increases | Decreases | Future increases | Future decreases | |
| Permanent corrections | --- | --- | --- | --- | --- | --- |
| Temporary corrections with origin in the fiscal year |
--- | 8.000 | --- | --- | --- | --- |
| Temporary corrections with origin in previous years |
--- | 8.000 | ||||
Table of details of corrections to the profit and loss account result (excluding the correction for IS) (page 26 bis to 26 sexies of form 200)
| Detail of settings | Type (2020) | Outstanding balance at the beginning of the fiscal year | Exercise corrections | Outstanding balance at the end of the fiscal year | ||||
|---|---|---|---|---|---|---|---|---|
| Permanent | Temporary (origin in the fiscal year) | Temporary (origin in previous exercises ) | ||||||
| Differences between accounting tax amortization (art. 12.1 LIS) |
INCREASE | --- | --- | --- | --- | |||
| Differences between accounting tax amortization (art. 12.1 LIS) |
DECREASE | [02569] 8.000 | --- | --- | [02568] 8.000 | [02570] 0 | ||