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Practical Handbook for Companies 2021

Negative permanent adjustments

In the event that the taxpayer has to make a correction to the Profit and Loss Account result that entails a permanent negative correction to the accounting result, on completing the corresponding box on pages 12 and 13, the breakdown box "Details of corrections to the profit and loss account result (excluding the correction for Corporation Tax)" on page 19 of form 200 will be shown simultaneously in the Companies WEB form.This information, once completed, shall be grouped in the detailed table on pages 26a to 26e of Form 200.

In this case, only the box corresponding to "Decreases in permanent corrections" in the part of the table on page 19 of Form 200 dedicated to "Corrections for the financial year" will be enabled for completion. The column showing the outstanding balances at the beginning and at the end of the year cannot be filled in because as this is a permanent off-balance-sheet adjustment there is no outstanding balance as the adjustment cannot be reversed in subsequent years.

Example:

Entity B, whose net turnover in the immediately preceding tax period is less than EUR 40 million, receives dividends of EUR 10,000 from BETA, a company resident in Spain.This dividend meets all the requirements established in articles 21.1 and 21.2 of the LIS, therefore, the exemption regulated in the aforementioned article 21 of said Law may be applied.The entity's tax period coincides with the calendar year.

In this example, entity "B" has a accounting income that is not tax income, because it is exempt under Article 21 LIS, so it must make a negative adjustment in form 200 for the period, to the accounting result in the box [00370] "Exemption on dividends or shares in profits of resident entities (Article 21.1, 21.10 and DT 40ª LIS)" on page 12 of form 200 for the amount of 10,000 euros.This is a permanent correction because according to the LIS this income will not have to be included in the tax base in future years.

Financial yearAccountFiscallyTax correctionForm 200
2021 + 10,000 0 - 10,000 Box [00370]

In the WEB Companies form, when box [00370] is to be completed, the box on page 19 of form 200 will be displayed.Only the box corresponding to "Decreases in permanent corrections" in the part of the table dedicated to "Corrections for the financial year", which must be filled in to the value of 10,000 euros, will be enabled to be completed.The form shall transfer the amount completed here to box [02966] on page 26c of Form 200.

Details of corrections to the profit and loss account (excluding the correction for IS) (page 19 of Form 200)

Total --- --- --- 10,000 --- ---
2021 fiscal year
tax adjustments
Balance outstanding at
principle of exercise
Exercise correctionsBalance outstanding end
of exercise
Future increasesFuture decreasesIncreasesDecreasesFuture increasesFuture decreases
Permanent corrections --- --- --- 10,000 --- ---
Temporary adjustments with origin
in the exercise
--- --- --- --- --- ---
Temporary adjustments with origin
in previous years
--- ---

Table of details of corrections to the profit and loss account result (excluding adjustment for IS) (pages 26a to 26e of Form 200)

Detail of adjustmentsTipoOutstanding balance
at the beginning of the year
Exercise correctionsOutstanding balance
at the end of the financial year
PermanentTemporary
(origin in
the exercise)
Temporary
(originating in exercises
previous)
Exemption on dividends or shares
in profits of resident entities
(art. 21.1, 21.10 and DT 40ª LIS)
DISMINUCIÓN --- [02966] 10.000 --- --- ---