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Practical Manual of Companies 2020.

Pension expenditure and provisions not affected by article 11.12 LIS (articles 14.1, 14.6 and 14.8 LIS)

Although in accounting terms, the allocations to provisions made in the tax period are deductible, the Corporate Tax regulations establish the non-deductibility of some expenses for provisions, which implies that the taxpayer has to make a series of adjustments that must be recorded in the boxes [00335] and [00336] «Expenses and provisions for pensions not affected by art. 11.12 LIS (arts. 14.1, 14.6 and 14.8 LIS)» on page 12 of model 200:

  • article 14.1 of the LIS establishes that for provisions and internal funds for the coverage of contingencies identical or analogous to those that are object of the Consolidated Text of the Law for the Regulation of Pension Plans and Funds, approved by Royal Legislative Decree 1/2002, of November 29.

    Therefore, in the tax period in which these expenses for provisions and internal funds are recorded, the amount thereof must be entered in box [00335] of increases.

    However, article 14.1 of the LIS establishes that these expenses will be tax deductible in the tax period in which the benefits are paid, so in said tax period they must be entered in the box [00336] of reductions the amounts corresponding to those expenses that, in a previous tax period, were included in the manner indicated.

  • article 14.6 of the LIS establishes that personnel expenses that correspond to payments based on equity instruments, used as a remuneration formula for employees, and are satisfied through the delivery of the themselves, will be tax deductible when this delivery occurs.

    In application of the provisions of this provision, the taxpayer, in the tax period in which these personnel expenses are recorded, enter their amount in box of increases. And in the tax period in which the delivery of said instruments occurs, the taxpayer must enter the amounts in box [00336] of reductions corresponding to those expenses that, in a previous tax period, were included in the manner indicated.

  • In the first paragraph of article 14.8 of the LIS it is established that the expenses related to the technical provisions fund made by the mutual guarantee companies will be deductible, charged to their profit and loss account. , until the aforementioned fund reaches the mandatory minimum amount referred to in article 9 of Law 1/1994, of March 11, on the Legal Regime of Reciprocal Guarantee Companies. Endowments that exceed the mandatory amounts will be 75 percent deductible.

    Therefore, once the technical provisions fund reaches that minimum amount, the expenses related to said fund will only be deductible by 75 percent , so they will have to be recorded in the box [00335] of increases, the amount of 25 percent corresponding to those non-deductible expenses.