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Practical Handbook for Companies 2021

Expenditure arising from the expiry of an employment or trade relationship

The article 15 i) of the LIS establishes that expenses arising from the termination of the employment relationship, ordinary or special, or from the commercial relationship referred to in article 17.2.e) of Law 35/2006, of 28 November, on Personal Income Tax and partial amendment of the laws on Corporate Income Tax, Non-Resident Income Tax and Wealth Tax, or both, even when paid in several tax periods, which exceed, for each recipient, the greater of the following amounts, are not tax-deductible:

  • 1 million.

  • The amount is compulsorily established in the Workers' Statute, in its implementing regulations or, where applicable, in the regulations governing the enforcement of judgements, and cannot be considered to be that established by virtue of an agreement, pact or contract.However, in the case of collective dismissals carried out in accordance with the provisions of Article 51 of the Workers' Statute, or for the reasons set out in Article 52(c) of the aforementioned Statute, provided that, in both cases, they are due to economic, technical, organisational, production or force majeure causes, the amount established in the aforementioned Statute for unfair dismissal shall be mandatory.

For this purpose, the amounts paid by other companies which form part of the same corporate group fulfilling the circumstances set forth in Article 42 of the Commercial Code will be counted, regardless of their residence and the obligation of formulating consolidated annual accounts.

Filling in form 200

In application of the provisions of this precept, the taxpayer must make a positive adjustment to the accounting result in the tax period in which these expenses, considered non-deductible, are recorded in box [01817] "Expenses derived from the termination of the employment or commercial relationship (art. 15 i) LIS)" on page 12 of form 200.