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Practical Handbook for Companies 2021

From 01/01/2018

Regulation: Article 23 LIS, according to the wording of Law 6/2018, of 3 July.

Amount of the reduction

The positive income from the assignment of the right to use or exploit patents, utility models, complementary protection certificates for medicines and phytosanitary products, legally protected designs and models deriving from research and development and technological innovation activities, and advanced registered software deriving from research and development activities, shall be entitled to a reduction in the taxable base by the percentage resulting from multiplying by 60 percent the result of the following coefficient:

  1. In the numerator , expenses incurred by the transferor directly related to the creation of the asset, including those arising from subcontracting with unrelated third parties.These expenses shall be increased by 30 per cent, but in no case may the numerator exceed the amount of the denominator.

  2. In the denominator, expenses incurred by the transferor directly related to the creation of the asset, including those arising from subcontracting both with unrelated third parties and with persons or entities related to the transferor and from the acquisition of the asset.

In no case shall the aforementioned coefficient include financial expenses, repayments on properties or other expenses not directly related to the creation of the asset.

The reduction provided for in this section shall also apply to the positive income from the transfer of the intangible assets referred to therein, when such transfer is made between entities that are not related.

For the purposes of determining the legal protection regime for the intangible assets referred to in the first paragraph of this section, the provisions of Spanish, European Union and international industrial and intellectual property legislation applicable in Spanish territory shall apply.

Positive income eligible for reduction

For the purposes of applying this reduction, income from the assignment of the right to use or exploit the assets and the positive income from their transfer, which exceeds the sum of the expenses incurred by the entity directly related to the creation of the assets which have not been incorporated into the value of the assets, the amounts deducted by application of article 12.2 of the LIS in relation to the assets, and those expenses directly related to the assets, which have been included in the tax base, shall be considered as positive income subject to reduction.

Negative income eligible for reduction

In the event that negative income is obtained in a tax period and in previous tax periods the entity had obtained positive income to which it had applied the reduction provided for in this article, the negative income of that tax period shall be reduced by the percentage resulting from article 23 of the LIS.

The provisions of the preceding paragraph shall apply as long as the negative income does not exceed the amount of the positive income included in previous tax periods by applying the reduction provided for in this article.The excess will be included in full in the tax base and, in this case, the positive income obtained in a subsequent tax period will be included in full up to that amount, and the percentage resulting from the application of Article 23 of the LIS may be applied to the excess.

Requirements

The following conditions must be met for the application of the reduction:

  1. 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.

  2. 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.

  3. When the same assignment contract includes ancillary goods or services , the consideration for these must be differentiated in the contract.

  4. That the entity has the necessary accounting records to be able to determine each of the direct income and expenses referred to in Article 23 of the LIS, corresponding to the assets being transferred.

Filling in form 200

In accordance with the provisions of article 23 of the LIS, taxpayers must make the following adjustments in the boxes [01822] and [00372] "Reduction of income from certain intangible assets (art. 23 and DT 20ª LIS)" on page 13 of the tax form:

  • In the event that the taxpayer obtains positive income derived from the assignment or transfer of intangible assets, a negative adjustment must be made to the accounting result in box [00372], entering as the amount the percentage resulting from multiplying by 60 percent the result of the coefficient provided for in Article 23.1 of the LIS.

  • In the event that the taxpayer obtains negative income derived from the assignment or transfer of intangible assets and in previous tax periods has obtained positive income to which the reduction provided for in article 23 of the LIS has been applied (and whose integration in the tax base has been included in box [00372]), a positive adjustment must be made to the accounting result in the box [01822], entering the amount of this reduced negative income in the percentage resulting from article 23.1 of the LIS and with the limit of the positive income included in previous tax periods to which the reduction provided for in article 23 of the LIS has been applied.