Skip to main content
Practical Handbook for Companies 2021

Temporary positive adjustments originating in previous financial years

In the event that the taxpayer has to make an adjustment to the Profit and Loss Account result that entails a positive temporary adjustment originating in previous years, on completing the corresponding box on pages 12 and 13, the breakdown box "Details of adjustments to the profit and loss account result (excluding the adjustment for Corporation Tax)" on page 19 of form 200 will be shown simultaneously in the Companies WEM form on page 19 of form 200.This information, once completed, shall be grouped in the detailed table on pages 26a to 26e of Form 200.

In this case, the box corresponding to Increases should be filled in from "Temporary adjustments brought forward" in the part of the table devoted to "Corrections for the financial year". Likewise, the box at Future increases of Temporary corrections in the columns corresponding to "Balance outstanding at beginning of year" and "Balance outstanding at end of year" should be completed because the negative adjustment at source is reversed by positive off-balance sheet adjustments, which implies future increases in the tax base.As regards the box at Future increases in the column "Balance outstanding at start of year", it should be filled in for the same amount as was entered in the box at Future increase in the column "Balance outstanding at end of year" of the settlement of the previous tax period.On the other hand, for the column "Balance outstanding at year-end" the box future increases should be completed. The balance of this box will decrease until it becomes zero, when the entire amount has been reversed.

Therefore, during the tax periods in which the Correction reverses because it originates in previous years, in the part of the table corresponding to "Balance pending at the end of the year" the box Future increases of Temporary corrections will decrease its value with respect to the Balance of the previous year by the amount of the positive correction of this year. As a result, the "Balance outstanding at year-end" will reflect the total amount to be reversed in subsequent years.As this balance is included in the part of future increases, it indicates that this amount is being reversed through positive off-balance sheet adjustments.

Example

Starting from the example given in the assumption of a negative temporary adjustment arising in the year, we continue with the years 2023, 2024 and 2025.

Company "D", which in 2021 meets the requirements for the application of the tax incentives for small companies, acquires a computer, which is made available to it and becomes operational on 1 July 2021, for an amount of 6,000 euros.The residual value of the item is estimated to be insignificant, so that the depreciable value coincides with the acquisition price.

The company decides to depreciate the computer for accounting purposes according to the technical depreciation it estimates for the computer, which is the result of applying a coefficient of 25 per cent.The entity also decides to make the depreciation of the computer tax-deductible by applying the multiplier coefficient of 2 referred to in Article 103 of the LIS.

The entity's financial year coincides with the calendar year.The tax-deductible depreciation in 2023 shall be as follows:

  • Maximum rate applicable to the computer according to the officially approved depreciation tables:25%.
  • Application of the multiplier coefficient:2 x 25% = 50%.
  • Accelerated depreciation that could be practised:6,000 x 50% = 3,000 euros.
  • Tax-deductible depreciation:1,500 euros (this is the value of the asset pending depreciation for tax purposes).
  • The accounting depreciation taken by Company D in 2023 shall be as follows:

    6,000 x 25% = 1,500 Euros

Decrease in the result of the profit and loss account to be entered in box [00314]:1,500 - 1,500 = 0 euros

Therefore, in the financial year 2021 and following, the corrections to be made in the boxes [00313] and [00314] "Differences between accounting and tax depreciation (art. 12.1 LIS)" on page 12 of form 200 will be:

Financial yearTax depreciationAccounting depreciationCorrectionsForm 200Balance at year-end
+-
2021 6.000 x 0,5 x 50% = 1.500 6,000 x 0.5 x 25% = 750 --- 750 [00314] 750
2022 6.000 x 50% = 3.000 6.000 x 25% = 1.500 --- 1,500 [00314] 2,250
2023 Remaining asset value = 1,500 6.000 x 25% = 1.500 --- --- --- 2,250
2024 --- 6.000 x 25% = 1.500 1,500 --- [00313] 750
2025 --- Remaining asset value = 750 750 --- [00313] 0

Total tax depreciation = 1.500 + 3.000 + 1.500 = 6.000

Total book depreciation = 750 + 1.500 + 1.500 + 1.500 + 1.500 + 750 = 6.000

In the Companies WEB form, at fiscal year 2023, no off-balance sheet adjustment will be made because the accounting depreciation coincides with the tax depreciation. In the financial year 2023 the box [00314] will not be filled in but should be checked that the "Balance outstanding at the end of the financial year" is correct, for this purpose, go to the box [00314] and the table on page 19 of form 200 will be displayed and it should be checked that the box Future increases of Temporary corrections of the part corresponding to Balance outstanding at the beginning and end of the financial year, has a value of 2,250 euros, which is the accumulated balance of 2021 and 2022.

On fiscal year 2024 the tax adjustments will be as follows:

  • Tax-deductible depreciation:0 euro (because the asset is already fiscally depreciated)
  • The accounting depreciation taken by Company D in 2023 shall be as follows:

    6,000 x 25% = 1,500 Euros

Increase in the profit or loss on the profit and loss account to be entered in box [00313]:1,500 euros

In the Companies web form, in the fiscal year 2024, when the box [00313] is to be filled in, the box on page 19 of form 200 will be displayed and the box Aumentos de "Correcciones temporarias con origen en ejercicios anteriores" must be filled in from the part of the box dedicated to "Correcciones del ejercicio" for the amount of 1,500 euros.The form shall transfer the information to box [03193] "Temporary (originating in previous years)" on page 26d of Form 200.

Likewise, the part corresponding to "Balance pending at the beginning of the financial year" should be filled in, as this is a negative adjustment at source , the box Future increases should be filled in Temporary corrections for the amount of 2,250 euros as this is the value of the Future increase box in the "Balance pending at the end of the financial year" column for 2023, i.e. the accumulated value for 2021, 2022 and 2023.

As for the part corresponding to "Balance outstanding at the end of the year", as this is a negative adjustment at source, the box Future increases should be filled in Temporary corrections for 750 euros (2,250 - 1,500), which is the balance outstanding at the beginning of the year reduced by the reversed amount of 1,500 euros in 2024. The form shall transfer the completed information to box [03194] "Balance outstanding at the beginning of the financial year" on page 26d of Form 200.

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

Total 2,250 --- 1,500 --- 750 ---
2024 fiscal year
tax adjustments
Balance outstanding at
principle of exercise
Exercise correctionsBalance outstanding end
of exercise
Future increasesFuture decreasesIncreasesDecreasesFuture increasesFuture decreases
Permanent corrections --- --- --- --- --- ---
Temporary adjustments with origin
in the exercise
2,250 --- --- --- 750 ---
Temporary adjustments with origin
in previous years
1,500 ---

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)
Small companies:amortisation
accelerated (art. 103 LIS and DT 28ª LIS)
INCREASE [03194] 2.250 --- --- [03193] 1.500 [03195] 750

On fiscal year 2025 the tax adjustments will be as follows:

  • Tax-deductible depreciation:0 euro (because the asset is already fiscally depreciated)
  • Company D's accounting depreciation in 2025 is EUR 750 because this is the value of the asset still to be depreciated for accounting purposes.

Increase in the profit or loss on the profit and loss account to be entered in box [00313]:750 euros

In the Companies WEB form, in the financial year 2025, when box [00313] is to be completed, the table on page 19 of Form 200 will be displayed and the box on Increases of "Temporary corrections arising from previous financial years" in the part of the table dedicated to "Corrections for the financial year" in the amount of 750 euros must be completed.The form shall transfer the completed information to box [03193] "Temporary (originating in previous years)" on page 26d of Form 200.

Likewise, the part corresponding to "Balance outstanding at the beginning of the year" should be filled in, as this is a negative adjustment at source, the box Future increases of Temporary corrections should be filled in for the amount of 750 euros, as is the value of the future increase box in the Balance outstanding at the end of the year column for the financial year 2024.

On the other hand, with respect to the part corresponding to "Balance outstanding at year end", the box future increases of Temporary corrections should be completed for the amount of 0 euros (750 - 750), as there is no balance outstanding due to the fact that in this year has reversed the 750 euros that remained as balance outstanding at the beginning of this year. The form shall show 0 in box [03195] "Balance outstanding at the end of the financial year" on page 26d of Form 200.

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

Total 750 --- 750 --- --- ---
2025 fiscal year
tax adjustments
Balance outstanding at
principle of exercise
Exercise correctionsBalance outstanding end
of exercise
Future increasesFuture decreasesIncreasesDecreasesFuture increasesFuture decreases
Permanent corrections --- --- --- --- --- ---
Temporary adjustments with origin
in the exercise
750 --- --- --- --- ---
Temporary adjustments with origin
in previous years
750 ---

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)
Small companies:amortisation
accelerated (art. 103 LIS and DT 28ª LIS)
INCREASE [03194] 750 --- --- [03193] 750 [03195] 0