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Practical Handbook for Companies 2021

Education and Promotion Fund expenses


Royal Decree-Law 8/2021 of 4 May extends until 31 December 2021 the extraordinary measure that temporarily relaxes the use of the Cooperative Promotion and Education Fund, allowing the Fund to be used to any activity that helps to halt or alleviate the effects of the health crisis resulting from COVID-19, either through its own shares or by means of donations to other public or private entities, or to provide the cooperative with liquidity to guarantee its continued operation.Furthermore, if the Promotion and Education Fund is used for the purposes set out in the previous paragraph, the provisions of articles 13.3 and 19.4 of Law 20/1990 will not apply, i.e. will not lose its status as a fiscally protected cooperative and the amounts applied to this Fund will not be considered as income for the cooperative.

a) Cooperative outcomes

The box [C4] will include the amounts of the co-operative results that the co-operatives allocate, on a compulsory basis , to the Education and Promotion Fund, and which are tax deductible in accordance with the provisions of articles 18.2 and 19 of Law 20/1990.

For tax purposes, the deductible amount of the endowment to the Education and Promotion Fund may not exceed in each financial year 30 per cent of the net surplus of the Fund.The excess no will be fiscally deductible.

Article 58.1 of Law 27/1999 establishes that, of the surpluses taken into account for the determination of the co-operative result, after deducting losses of any kind from previous years and before taking into account corporate income tax, at least 5 per cent shall be allocated to the Education and Promotion Fund.

A tener en cuenta:

The allocations to this fund charged to cooperative results which are not tax-deductible should be included as accounting expenditure in the box [C2]. In addition, for the part that is not deductible for tax purposes, a positive adjustment must be made to the accounting result (box [C6]), the amount of which must be included in box [C7].

b) Extra-cooperative results

In the box [E4] the amounts of the extra-cooperative results that are destined by the cooperatives to the Education and Promotion Fund will be collected.These amounts are not tax deductible.

A tener en cuenta:

The allocations to this fund charged to extra-cooperative results, are not tax deductible, so a positive adjustment should be made to the accounting result (box [E6]), the amount of which should be included in box [E7].