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Practical Handbook for Companies 2021

Limits on inclusion in the taxable base of non-deductible expenses for tax purposes at the time they are recorded in the accounts

As we have already seen in the previous section, expenses that were not deductible in the tax period in which they were accounted for, as referred to in article 11.12 of the LIS, will be included in the tax base of the tax period in which the conditions for tax deductibility are met in accordance with the provisions of the Corporate Income Tax regulations, taking into account the following limits:

  1. According to the provisions of the first paragraph of article 11.12 of the LIS, these expenses will be included in the tax base in accordance with the provisions of this Law, with the limit of 70 per cent of the positive tax base prior to their inclusion, the application of the capitalisation reserve established in article 25 of this Law and the offsetting of negative tax bases.

    In relation to the 70 per cent limit, the fifteenth additional provision of the LIS establishes that, for tax periods commencing on or after 1 January 2016, taxpayers whose net turnover is at least EUR 20 million during the 12 months prior to the date on which the tax period commences shall replace this limit with the following:

    • 50 per cent, if the net turnover in the 12 months in question is at least EUR 20 million but less than EUR 60 million.

    • 25 per cent, if the net turnover in the 12 months in question is at least EUR 60 million.

    The amounts not integrated in a tax period will be subject to integration in the following tax periods with the same limit.For these purposes, the allocations corresponding to the oldest tax periods will be integrated first.

  2. For tax periods beginning on or after 1 January 2016, in accordance with the provisions of article 130.1 and the thirty-third transitory provision of the LIS, the limit established in article 11.12 of the LIS for the inclusion in the tax base of expenses that were not tax deductible in the tax period in which they were recorded, will only be applied to those that generated deferred tax assets that can be converted into a credit to the tax authorities, for an amount equal to the positive net tax liability corresponding to the tax period in which they were generated.

Filling in form 200

The application of the limit established in article 11.12 of the LIS in the integration into the tax base of these expenses that were not deductible in the tax period in which they were accounted for and which generated deferred tax assets, gives rise to adjustments that will be included in the boxes [00416] and [00543] "Application of the limit of art. 11.12 LIS, to the impairment losses of art. 13.1 LIS and provisions and expenses (articles.14.1 and 14.2 of the LIS)" from page 12 of Form 200:

  • In the tax period in which these expenses are tax deductible, in addition to entering their amount in box [00211], the amount of these expenses whose deductibility is not applicable in that period because they exceed the limit provided for in the first paragraph of article 11.12 of the LIS must be entered in box [00416].In other words, box [00416] should contain the difference between the amount entered in box [00211] and the amount corresponding to the limit provided for in that article.

  • Expenses that have not been included in the tax base in the tax period that were deductible because they exceeded the limit established in the first paragraph of article 11.12 of the LIS, must be included in the following tax periods in the box [00543], also taking into account the same limit.For this purpose, the second paragraph of article 11.12 of the LIS establishes that the allocations corresponding to the oldest tax periods shall be included first.

    A tener en cuenta:

    The boxes [00416] and [00543] "Application of the limit of art. 11.12 LIS, to the impairment losses of art. 13.1 LIS and provisions and expenses (arts.14.1 and 14.2 of the LIS)" should not be completed by cooperative societies, which will instead complete the boxes [00408] and [01037] "Application of the limit of art. 11.12 LIS to the impairment losses of art. 13.1 LIS and provisions and expenses (art. 14.1 and 14.2 LIS)" on page 14 of form 200.