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Practical Manual of Companies 2020.

Limits on inclusion in the taxable base of non-deductible expenses for tax purposes at the time they are recorded in the accounts

As we have already seen in the previous section, the expenses that were not deductible in the tax period in which they were accounted for, referred to in article 11.12 of the LIS , are will be included in the tax base of the tax period in which the conditions for tax deductibility are met in accordance with the provisions of the Corporate Tax regulations, taking into account the following limits :

  1. According to the provisions of first paragraph of article 11.12 of the LIS , these expenses will be integrated into the tax base in accordance with the provisions of this Law , with the limit of 70 percent of the positive tax base prior to its integration, to the application of the capitalization reserve established in article 25 of this Law and to the compensation of tax bases negative.

    In relation to the 70 percent limit, Fifteenth Additional Provision of the LIS establishes that, for tax periods beginning on or after January 1, 2016, taxpayers whose net amount of the turnover is at least 20 million euros during the 12 months prior to the date on which the tax period begins, they will replace said limit with the following:

    • 50 percent , when in the aforementioned 12 months the net amount of the turnover is at least 20 million euros, but less than 60 million euros.

    • 25 percent , when in the aforementioned 12 months the net amount of the turnover is at least 60 million euros.

    The amounts not integrated in a tax period will be subject to integration in subsequent tax periods with the same limit. For these purposes, the provisions corresponding to the oldest tax periods will be integrated first.

  2. For tax periods beginning on or after January 1, 2016 , as provided in article 130.1 and the thirty-third transitional provision of the LIS , the limit established in article 11.12 of the LIS for the integration into the tax base of expenses that were not tax deductible in the tax period in which they were recorded, will only apply to those that generated deferred tax assets susceptible to be converted into credit before the Tax Administration, for an amount equal to the positive liquid quota corresponding to the tax period of generation of those.

Filling in form 200

The application of the limit established in article 11.12 of the LIS in the integration into the tax base of these expenses that were not deductible in the tax period in which they were recorded and that generated deferred tax assets, gives rise to adjustments that are will be collected in boxes [00416] and [00543] «Application of the limit of art. 11.12 LIS, to losses due to deterioration of art. 13.1 LIS and provisions and expenses (arts. 14.1 and 14.2 of the LIS) » on page 12 of model 200:

  • In the tax period in which these expenses are tax deductible, in addition to entering their amount in box [00211] , box must be completed [00416] with the amount of those expenses whose deductibility is not applicable in said period because they exceed the limit provided for in the first paragraph of article 11.12 of the LIS. That is, in box [00416] the difference between the amount entered in box [00211] and the amount corresponding to the planned limit must appear. in said article.

  • Regarding the expenses that have not been integrated into the tax base in the tax period that were deductible for exceeding the limit established in the first paragraph of article 11.12 of the LIS, they must be integrated in the immediately following tax periods in box [00543] , also taking into account the same limit. For this purpose, the second paragraph of article 11.12 of the LIS establishes that the provisions corresponding to the oldest tax periods will be integrated first.

    Keep in mind:

    The boxes [00416] and [00543] «Application of the limit of art. 11.12 LIS, to losses due to deterioration of art. 13.1 LIS and provisions and expenses (arts. 14.1 and 14.2 of the LIS)» must not be completed by cooperative societies, which will instead fill in boxes [00408] and [ 01037] «Application of the limit of art. 11.12 LIS to losses due to deterioration of art. 13.1 LIS and provisions and expenses (art. 14.1 and 14.2 LIS)» on page 14 of model 200.