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Practical Manual of Companies 2020.

Negative tax bases excluded from offsetting

Negative tax bases may not be offset when the following circumstances occur:

  1. The majority of the share capital or the rights to participate in the results of the entity that have been acquired by a person or entity or by a group of people or related entities , after the conclusion of the tax period to which the negative tax base corresponds.

  2. The persons or entities referred to in the previous paragraph would have had a participation of less than 25 percent at the time of the conclusion of the tax period to which the negative tax base corresponds.

  3. The acquired company finds itself in one of the following circumstances:

    1. Has not carried out any economic activity within the 3 months prior to the acquisition.

    2. Has carried out a different or additional economic activity to that carried out previously in the 2 subsequent years, which will determine, in itself, a net amount of the turnover in those subsequent years greater than the 50 percent of the average amount of the entity's turnover corresponding to the previous 2 years. A different or additional activity is deemed one that is assigned a different group to the previous one, according to the National Classification of Economic Activities.

    3. It is a patrimonial entity under the terms established in article 5.2 of the LIS .

    4. The entity has been removed from in the index of entities for not submitting the Corporate Tax declaration for 3 consecutive tax periods (article 119.1 b) of the LIS).