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Practical Manual for Companies 2021.

Pension expenditure and provisions not affected by article 11.12 LIS (articles 14.1, 14.6 and 14.8 LIS)

Although, from an accounting point of view, the allocations to provisions made in the tax period are deductible, the Corporate Tax regulations establish the non-deductibility of some expenses for provisions, which implies that the taxpayer has to make a series of adjustments that must be recorded in boxes [00335] and [00336] "Expenses and provisions for pensions not affected by art. 11.12 (arts. 14.1, 14.6 and 14.8 LIS)» on page 12 of form 200:

  • Article 14.1 of the LIS establishes that expenses for provisions and internal funds for the coverage of contingencies identical or similar to those that are the subject of the Revised Text of the Law on the Regulation of Pension Plans and Funds, approved by Royal Legislative Decree 1/2002, of November 29, will not be deductible.

    Therefore, in the tax period in which these expenses for provisions and internal funds are recorded, the amount thereof must be recorded in box [00335] of increases.

    However, article 14.1 of the LIS establishes that these expenses will be tax deductible in the tax period in which the benefits are paid, so in said tax period the amounts corresponding to those expenses that, in a previous tax period, were included in the manner indicated must be recorded in box [00336] of decreases.

  • Article 14.6 of the LIS establishes that personnel expenses that correspond to payments based on equity instruments, used as a formula for remunerating employees, and are satisfied through the delivery of the same, will be tax deductible when this delivery occurs.

    In application of the provisions of this precept, the taxpayer in the tax period in which these personnel expenses are recorded must record the amount thereof in box [00335] of increases. And in the tax period in which the delivery of said instruments occurs, the taxpayer must record in box [00336] of decreases the amounts corresponding to those expenses that, in a previous tax period, were included in the manner indicated.

  • In the first paragraph of article 14.8 of the LIS it is established that the expenses related to the technical provisions fund incurred by the mutual guarantee companies will be deductible, charged to their profit and loss account, until the aforementioned fund reaches the mandatory minimum amount referred to in article 9 of Law 1/1994, of March 11, on the Legal Regime of Mutual Guarantee Companies. Allocations exceeding the mandatory amounts will be deductible by 75 percent.

    Therefore, once the technical provisions fund reaches this minimum amount, the expenses related to said fund will only be deductible up to 75 percent , so the amount of 25 percent corresponding to these non-deductible expenses must be entered in box [00335] of increases.