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Practical Manual of Companies 2021.

Loss of value caused by fair value criteria

For tax periods beginning on or after January 2017 an exception to the general rule established by article 17.1 of said Law, according to which changes in value caused by application of the fair value criterion will not have tax effects as long as they do not have to be allocated to the profit and loss account.

For these purposes, article 15 l) of the LIS establishes that 1## in the own funds of entities that meet the requirements required by article 15 k) of said Law, which are charged to the profit and loss account, unless, previously, it has been integrated into the tax base, if applicable, an increase in value corresponding to homogeneous values of the same amount.

Filling in form 200

In application of the provisions of article 15.l) of the LIS, the taxpayer must include in box [01808] "Decrease in value caused by fair value criteria (art. 15 l) LIS)" on page 12 of model 200, the amount of decreases in value caused by application of the fair value criterion corresponding to securities representing participations in the capital or equity of entities that meet the aforementioned requirements .

Application of article 15 k) LIS

If you meet the two requirements of art. 21.1.a) LIS:

  • Participation ≥ 5% or V. Acq. > €20 M (Shares acquired before 01-01-2021)
  • Age 1 year

It is not necessary to comply with the requirements of art. 21.1.a) LIS:

  • Participation ≥ 5% or V. Acq. > €20 M (Shares acquired before 01-01-2021)
  • Age 1 year
Furthermore, meets the requirement of art. 21.1.b) LIS, that is, the investee entity pays tax
at a nominal rate ≥ 10%
But does not meet the requirement of art. 21.1.b) LIS, that is, the investee entity pays taxes
at a nominal rate < 10%
Then, article 15 k) of the LIS will apply