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Practical Handbook for Companies 2021

Non-deductible expenses due to being considered payment from shareholders’ equity

The article 15 a) of the LIS stipulates that expenses representing a return on equity are not tax deductible.

For these purposes, the remuneration corresponding to the securities representing the capital or own funds of entities, regardless of their accounting consideration, shall be considered as remuneration of own funds.

Likewise, the remuneration corresponding to participating loans granted by entities forming part of the same group of companies in accordance with the criteria established in article 42 of the Commercial Code, regardless of residence and the obligation to prepare consolidated annual accounts, shall be considered as remuneration of shareholders' equity.


With regard to participating loans, the seventeenth transitional provision of the LIS establishes that the provisions of article 15 a) of the LIS shall not apply to participating loans granted prior to 20 June 2014.

Filling in form 200

In application of the provisions of this provision, the taxpayer must make a positive adjustment to the accounting result in the tax period in which these expenses considered non-deductible are accounted for, in box [01002] "Expenses not deductible as they are considered to be remuneration of own funds (art. 15 a) LIS)" on page 12 of form 200.