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Practical Handbook for Companies 2021

From 29-09-2013 to 30-06-2016

Regulation:Article 23 LIS, as originally drafted.

Amount of the reduction and requirements

Income from the assignment of the right to use or exploit patents, drawings or models, plans, secret formulas or procedures, of rights to information relating to industrial, commercial or scientific experiments, shall be included in the tax base at 40 per cent of their amount, when the following conditions are met:

  1. The transferor entity must have created the assets to be transferred at least 25 percent of their cost .

  2. The transferee uses the rights of use or exploitation in the pursuit of an economic activity and the results of that use do not materialise in the supply of goods or services by the transferee that generate tax-deductible expenses in the transferor, provided that, in the latter case, that entity is related to the transferee.

  3. The transferee does not reside in a country or territory classified as non-cooperative jurisdiction, unless it is located in a Member State of the European Union and the taxpayer proves that the transaction is carried out for valid economic reasons and that it carries out economic activities.

  4. Where the same assignment contract includes ancillary services, should be differentiated in that contract.

  5. That the entity has the necessary accounting records to be able to determine the direct income and expenses corresponding to the assets being transferred.

The foregoing shall also apply in the case of the transfer of the intangible assets referred to therein, when such transfer is made between entities that do not form part of a group of companies according to the criteria established in Article 42 of the Commercial Code, irrespective of residence and the obligation to prepare consolidated annual accounts.

Income from the sale of intangible assets

In the case of the transfer of intangible assets, for the purposes of their inclusion in the tax base with the reduction set out in the previous section, regardless of whether or not the asset is recognised in the entity's balance sheet, income shall be understood as the positive difference between the income for the year from the transfer of the right to use or exploit the assets, and the amounts deducted therefrom by application of articles 12.2 or 13.3 of the LIS, where applicable, and for those expenses for the year directly related to the transferred asset.

Filling in form 200

In the event that the taxpayer applies the reduction foreseen in the previous sections on income derived from the assignment or transfer of intangible assets, a negative adjustment must be made to the accounting result in box [00372] "Reduction of income from certain intangible assets (art. 23 and DT 20ª LIS)" on page 13 of form 200, entering 60 per cent of said income.