Temporary positive adjustments originating in the financial year
In the event that the taxpayer has to make a correction to the result of the Profit and Loss Account that represents a temporary positive correction originating in the year to the accounting result, when completing 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 " Increases in temporary corrections originating in the fiscal year" in the section of the table on page 19 of form 200 dedicated to "Corrections for the fiscal year" be completed. Likewise, the box for future decreases in temporary corrections in the row corresponding to "Outstanding balance at the end of the fiscal year" must be completed. The reason is that, although it is a positive adjustment at origin, it will be reversed by negative extra-accounting adjustments, this means that this positive temporary correction originating in the fiscal year will entail future decreases in the tax base, therefore, in column "Pending balance at the end of the fiscal year" , the decreases box must be filled in, so that year after year the balance increases if the adjustment continues to be at origin or decreases, if that adjustment has begun to reverse, but always in the column of " Future decreases" . Once the first tax period in which the adjustment is made has elapsed, in the following settlements the box for future decreases in the column “ Outstanding balance at the beginning of the year” be completed for the same amount that was entered in the box for future decrease in the column for “Outstanding balance at the end of the year” of the settlement for the previous tax period.
For all the above, during the tax periods in which the Correction originates in the fiscal year itself, in the part of the table corresponding to "Pending balance at the end of the fiscal year", the box for future decreases in temporary corrections will increase its value with respect to the Balance of the previous fiscal year by the amount of the positive correction for this fiscal year. With all this, the "Outstanding balance at the end of the fiscal year" will reflect the total amount pending reversal in subsequent fiscal years through negative extra-accounting adjustments.
Example:
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" depreciates the machinery for tax purposes in accordance with 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 for the years 2020 to 2028.
| 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 accounting depreciation = 24,000 x 8 + 8,000 = 200,000
Total tax amortization = 100,000 + 100,000 = 200,000
The tax correction that Company "C" will make to determine the taxable base for the Corporate Tax for 2020 (box [00303]) will be the following:
| Accounting amortization | Tax amortization | Increase in profit and loss account result |
|---|---|---|
| 200,000 x 50% = 100,000 | 200,000 x 12% = 24,000 | 76,000 |
In 2020 financial year , as the accounting depreciation carried out in the financial year by the taxpayer is higher than the tax-admissible depreciation as established in article 12.1 of the LIS, the amount of this difference must be recorded due to excess in box [00303] "Differences between accounting and tax depreciation (art. 12.1 LIS)" of increases , specifically, in 2020 a positive extra-accounting adjustment must be made for an amount of 76,000 euros. A positive temporary correction has been generated with origin in the fiscal year.
Likewise, when the machinery in subsequent tax periods is depreciated in the accounting terms, the amount of the extra-accounting adjustment originating in previous years must be recorded in box [00304] "Differences between accounting and tax depreciation (art. 12.1 LIS)" of decreases , as a result of the reversal of the positive adjustment. The value to be included in this box will be the amount of the tax amortization.
In the web Companies form, in period 2020 when box [00303] is to be filled in, the table on page 19 of form 200 will be displayed and box Increases of "Temporary corrections originating in the fiscal year" of the part of the table dedicated to " Corrections for the fiscal year" for an amount of 76,000 euros must be filled in. The form will place the completed information in box [02562] "Temporary corrections of the fiscal year (originating in the fiscal year)" on page 26 bis of form 200. Likewise, in the box on page 19 of form 200, the part corresponding to "Outstanding balance at the end of the year" must be completed. Furthermore, since we are dealing with a positive adjustment at source , the box for future decreases of Temporary corrections for a value of 76,000 euros must be completed, since this positive temporary difference at source will be reversed through negative extra-accounting adjustments and will entail future decreases in the tax base. In order to complete the box for future decreases in the row corresponding to "Pending balance for corrections at the end of the fiscal year" , you must go to box [00304] on page 12 of form 200 so that the part of the table relating to decreases is displayed. The form will transfer the amount to box [02570] "Outstanding balance at the end of the 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 | --- | --- | 76,000 | --- | --- | 76,000 |
| Exercise 2020 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 |
--- | --- | 76,000 | --- | --- | 76,000 |
| Temporary corrections with origin in previous years |
--- | --- | ||||
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 and tax amortization (art. 12.1 LIS) |
INCREASE | --- | --- | [02562] 76,000 | --- | --- | ||
| Differences between accounting and tax amortization (art. 12.1 LIS) |
DECREASE | --- | --- | --- | --- | [02570] 76,000 | ||
In the fiscal year 2021 , the tax correction that Company "C" will make to determine the taxable base for Corporate Tax (box [00303]) will be the following:
| Accounting amortization | Tax amortization | Increase in profit and loss account result |
|---|---|---|
| 200,000 x 50% = 100,000 | 200,000 x 12% = 24,000 | 76,000 |
In the Web Companies form, in period 2021, this adjustment will continue to be a positive temporary correction originating in fiscal year , therefore, in the same way as in 2020, when box [00303] is filled out, the table on page 19 of form 200 will be displayed and you must proceed to fill out box of increases of « Temporary corrections originating in fiscal year» of the part of the table dedicated to «Corrections for the fiscal year» for an amount of 76,000 euros. The form will transfer the amount to box [02562] on page 26 bis of form 200. Likewise, in the table on page 19, the part corresponding to "Pending balance at the beginning of the year" must be completed. As we are dealing with a positive adjustment at origin, the box for future decreases of Temporary corrections must be completed for an amount of 76,000 euros, since this is the value of the future decrease box in the Pending balance at the end of the year column for fiscal year 2020.
Regarding the part corresponding to « Outstanding balance at the end of the year » , since it is a positive adjustment at source , the box for future decreases of Temporary corrections must be completed because this positive temporary difference at source will be reversed through negative extra-accounting adjustments and will entail future decreases in the tax base. The amount of the aforementioned box will be 152,000 euros (76,000 + 76,000), which is the accumulated balance for 2020 and 2021. The form will transfer the amount to 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 | --- | 76,000 | 76,000 | --- | --- | 152,000 |
| Exercise 2021 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 |
--- | 76,000 | 76,000 | --- | --- | 152,000 |
| Temporary corrections with origin in previous years |
--- | --- | ||||
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 | --- | --- | [02562] 76,000 | --- | --- | ||
| Differences between accounting tax amortization (art. 12.1 LIS) |
DECREASE | [02569] 76,000 | --- | --- | --- | [02570] 152,000 | ||