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Practical Manual of Companies 2020.

Non-deductibility assumptions

1. Assumption of article 13.2 b) of the LIS

This article establishes that due to impairment of securities representing participation in the capital or equity of entities will not be deductible ##1## when in the tax period in which the impairment is recorded, any of the following circumstances occur:

  • The requirement established in article 21.1 a) of the LIS is not met . This requirement is that the percentage of participation, direct or indirect, in the capital or own funds of the entity is at least 5 percent or that the acquisition value of the participation is greater than 20 million euros. In addition, it is required that the participation must be held continuously for at least 1 year, and

  • That in the case of participation in the capital or equity of entities not resident in Spanish territory, in said tax period the requirement established in article 21.1 b) of the LIS, that is, that the entity has been subject to and not exempt from a foreign tax of an identical or analogous nature to this Tax at a nominal rate of at least 10 percent.

Filling in form 200

In application of the provisions of article 13.2 b) of the LIS, the taxpayer must make the following adjustments in boxes [00325] and [00326] "Adjustments for losses due to impairment of values representing participation in the capital or own funds (art. 13.2 b) LIS)» on page 12 of model 200:

  • In box [00325] of increases, the taxpayer must enter the amount of losses due to impairment of securities representing participation in the capital or equity of entities accounted for in the tax period object of declaration, which are not deductible by application of article 13.2 b) of the LIS.

  • However, in accordance with the provisions of article 20 of the LIS , these impairment losses will be deductible in the tax period in which the participation is transferred or deregistered, provided that the aforementioned requirements are met during the year prior to the transfer or deregistration of the participation.

    In these cases, the taxpayer in the tax period following the accounting of the aforementioned impairment losses that caused a positive adjustment to the accounting result (box [00325]) because they are not tax deductible, must include in box [00326] of decreases, the amount corresponding to said deterioration as a consequence of its reversal.

If you do not meet one or none of the requirements of art. 21.1.a) LIS:

  • Participation ≥ 5% or V. Acq. > €20M
  • Age 1 year

But does meet the requirement of art. 21.1.b) LIS, that is, the investee entity is taxed at a nominal rate ≥ 10%

Then article 13.2 LIS will apply.

Therefore, they will not be deductible, although they will be deductible when the participation is transferred or deregistered (art. 20).

2. Assumption of article 15 k) of the LIS

This article establishes that due to impairment of securities representing participation in the capital or equity of entities will not be deductible ##1## when in the tax period in which the impairment is recorded, with respect to which any of the following circumstances occur:

  • The requirements established in article 21 of the LIS are met , or

  • That in the case of participation in the capital or equity of entities not resident in Spanish territory, in said tax period the requirement established in article 21.1 b) of the LIS.

Filling in form 200

In application of the provisions of this provision, the taxpayer must include in box [01807] "Losses due to impairment of securities representing shares in the capital or own funds (art. 15 k) LIS" on page 12 of model 200, the amount of losses due to impairment of securities representing participation in the capital or equity of entities accounted for in the tax period being declared, which does not They are deductible by application of article 15 k) of the LIS.

Application of article 15 k) LIS

If you meet the two requirements of art. 21.1.a) LIS:

  • Participation ≥ 5% or V. Acq. > €20M
  • Age 1 year

It is not necessary to comply with the requirements of art. 21.1.a) LIS:

  • Participation ≥ 5% or V. Acq. > €20M
  • Age 1 year
Furthermore, meets the requirement of art. 21.1.b) LIS, that is, the investee entity pays tax
at a nominal rate ≥ 10%
But does not meet the requirement of art. 21.1.b) LIS, that is, the investee entity pays taxes
at a nominal rate < 10%
Then, article 15 k) of the LIS will apply.
Therefore, they will not be deductible in any case.