Tax period and accrual of Corporate Tax

1. Tax period

Regulation: Article 27 LIS

a) General rule

The tax period referred to in the Corporate Tax return must coincide with the financial year of the entity , but in no case may it exceed twelve months.

Except in cases where a different period is declared, the tax period shall be understood to refer to calendar year .

b) Special rules

Even if the financial year has not ended, tax period will end in any case:

1. When entity is extinguished .

   The extinction of the entity will occur when the cancellation entry in the Commercial Registry takes place, and said entity is obliged to present the Tax return within the period of 25 calendar days following the six months after said entry is made.

2. When a change of residence of the entity resident in Spanish territory to foreign takes place.

3. When the transformation of the legal form of the entity occurs and this determines the non-subject to Corporate Tax of the resulting entity.

4. When the transformation of the corporate form of the entity occurs, or the modification of its statute or of its legal regime , and this determines the modification of its tax rate or the application of a different tax regime .

c) Summary

The duration of the tax period can be:

1. Equal to twelve months

   • coinciding with the calendar year
   • not coinciding with the calendar year

2. Less than twelve months

   In any case, those who pay Corporation Tax must submit a separate tax return for each tax period.

   Example:

   The bylaws of the corporation "X", which is dedicated to the marketing of cereals, establishes that its fiscal year coincides with the calendar year.

   In order to adjust the financial year to the calendar of cereal marketing campaigns, the General Meeting of Shareholders, validly constituted for this purpose, agreed on April 19, 2021 to modify the entity's financial year, which will begin on June 1 of each year and will close on May 31 of the following year.

   Consequently, the current fiscal year (which had begun on January 1 of the previous year) will close on May 31, 2021, and the first of the fiscal years adjusted to the modification agreed by the General Meeting will begin on June 1, 2021.

   In this case there are two tax periods, both starting within the same calendar year 2021:

   1. From January 1, 2021 to May 31, 2021.
   2. From June 1, 2021 to May 31, 2022.

   Therefore, Corporation "X" will have to file two Corporate Tax returns, one for each of the tax periods mentioned.

2. Accrual

Regulation: Article 28 LIS

Corporate Tax is due on the last day of the tax period.