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Practical Handbook for Companies 2021

Charity and social work of savings banks and bank foundations

In application of the provisions of article 24 of the LIS, savings banks and banking foundations must make the following adjustments in the boxes [00373] and [00374] "Charity work of savings banks and banking foundations (art. 24 LIS)":

1.Articles 24.1 and 24.2 of the LIS

According to the provisions of article 24.1 of the LIS the amounts that savings banks and banking foundations allocate from their results to the financing of charitable and social works, in accordance with the rules governing them, will be tax deductible .

In this sense, article 24.2 of the LIS establishes that the amounts allocated to the charitable and social work of savings banks and banking foundations must be applied, at least, at 50 percent, in the same tax period to which the allocation corresponds, or in the immediately following one, to the realisation of the investments affected, or to defray the expenses of sustaining the institutions or establishments covered by the allocation.

Filling in form 200

Consequently, savings banks and banking foundations must include in the box [00374] of decreases, the amounts that they allocate from the result of the financial year corresponding to the tax period being declared to the financing of charitable and social works.

2.Article 24.3 of the LIS

They shall not be included in the tax base:

  1. Maintenance expenses of the Charity and social work performed under the fund for welfare projects, even when they exceed allocations made, without prejudice to the fact that are considered application of future allocations.However, these expenses are tax deductible when, in accordance with accounting regulations applicable, recording charged to the profit and loss account.

  2. Income derived from the transfer of investments related to the charity and social work.

Filling in form 200

Savings banks and banking foundations must include in the box [00373] of increases, the amount of the expenses for the maintenance of the charitable work in the tax period in which they accrue, and in the box [00374] of decreases, the amount of the income derived from the transfer of investments affected by the charitable work in the tax period in which the income accrues.

3.Article 24.4 of the LIS

The endowment to the charitable work carried out by the banking foundations or, where applicable, the expenses for the maintenance of the charitable work which, in accordance with the applicable accounting regulations, are recorded with a charge to the profit and loss account, may reduce the taxable income of the credit institutions in which they hold an interest, in the proportion that the dividends received from the said institutions represent with respect to the total income of the banking foundations, up to the maximum limit of the aforementioned dividends.

A tener en cuenta:

In order to apply this reduction, bank foundations must notify the credit institution that has paid dividends, the amount of the reduction thus calculated and non application of said amount as item tax deductible in your tax return for this tax.

Filling in form 200

Provided that the provisions of article 24.4 of the LIS are complied with, banking foundations must include in the box [00373] of increases, the amount of the endowment to the charitable-social work, or, where applicable, that of its maintenance expenses, in the proportion that the dividends received from the credit institutions represent with respect to the total income of the banking foundations and up to the maximum limit of the aforementioned dividends.For this purpose, the banking foundation must notify to the credit institution that paid the dividends the amount of the reduction thus calculated and the non-application of this amount as a tax-deductible item in its tax return.