Impairment losses arising from possible insolvency of debtors (art. 13.1 LIS) not affected by article 11.12 or TD 33.1 of the LIS

When there is a risk in the collection of a certain debt, entities are obliged from an accounting point of view to set aside a provision for debtor insolvency.

However, article 13.1 of the LIS that only losses due to impairment of credits arising from possible insolvencies of debtors be tax deductible when at the time of the tax accrual any of the following circumstances occur:

That six months has passed since the obligation fell due.
That the debtor is declared to be in bankruptcy proceedings.
That the debtor is being prosecuted for the crime of concealment of assets
That the obligations have been claimed by the courts or are in litigation or arbitration proceedings, the solution of which depends on their collection.

However, even if the above circumstances occur, will not be tax deductible :

Those corresponding to credits owed by public law entities, except when they are the subject of an arbitration or judicial procedure that deals with their existence or amount.
Those corresponding to credits owed by related persons or entities, unless they are in a situation of bankruptcy and the liquidation phase has been opened by the judge, in the terms established in Law 22/2003, of July 9, Bankruptcy.
Those corresponding to global estimates of the risk of insolvency of clients and debtors.

New:

With effect for the tax periods beginning in 2020 and in 2021 , Royal Decree-Law 35/2020, of December 22, on urgent measures to support the tourism, hospitality and commerce sectors and in tax matters, establishes in its article 14 that taxpayers of the Corporate Tax who meet the conditions of article 101 of the LIS to be considered small companies, may deduct , in said periods, the losses due to impairment of credits derived from possible insolvencies of debtors when three months have elapsed since the due date of the obligation referred to in letter a) of article 13.1 of the LIS.

In this way, for small companies, the period established for being able to deduct losses due to impairment of credits arising from possible debtor insolvencies is reduced in these periods, going from 6 months to 3 months, the time required to have elapsed between the maturity of the obligation and the accrual of the tax.

Filling in form 200

These differences in criteria between the accounting standard and the tax standard determine the need to make a series of adjustments in boxes [00321] and [00322] "Impairment losses under art. 13.1 LIS not affected by art. 11.12 LIS or by DT 33.1 LIS" on page 12 of form 200:

In box [00321] of increases, the taxpayer will include the amount of losses due to impairment in the value of credits arising from possible insolvencies of debtors recorded in the tax period subject to declaration, which are not tax deductible according to the provisions of article 13.1 of the LIS.
Instead, the taxpayer will include in box [00322] of decreases the amount of those losses recorded in the period in which they are tax deductible by complying with the requirements of article 13.1 of the LIS.
When in a tax period after the accounting of the aforementioned impairment losses that gave rise to a positive adjustment to the accounting result ( box [00321] ) because it was not tax deductible, the recovery of the value of the impairment occurs, the taxpayer must include in box [00322] the amount corresponding to said reversal.

Keep in mind:

In these boxes [00321] and [00322] "Impairment losses under art. 13.1 LIS not affected by art. 11.12 LIS or by DT 33.1 LIS" only the amounts relating to impairment losses on credits under article 13.1 of the LIS should appear, provided that they are not affected by the provisions of article 11.12 of said rule , in which case they must be declared as provided in the following section ( boxes [00415] and [00211] "Impairment losses under art. 13.1 LIS and provisions and expenses (arts. 14.1 and 14.2 LIS) referred to in art. 11.12 and DT 33.1 LIS») .