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Practical Handbook for Companies 2021

Negative tax bases excluded from offsetting

Tax losses may not be offset when the following circumstances apply:

  1. The majority of the share capital or of the rights to participate in the results of the entity acquired by a person or entity or by a group of persons or related entities after the end of the tax period to which the negative tax base relates.

  2. The persons or entities referred to in the preceding paragraph would have had a shareholding of less than 25 per cent at the time of the end of the tax period to which the negative tax base corresponds.

  3. The acquired company finds itself in one of the following circumstances:

    1. Has not carried out any economic activity within the 3 months prior to the acquisition.

    2. Has carried out a different or additional economic activity to that previously carried out in the 2 subsequent years, which in itself determined a net turnover in those subsequent years of more than 50% of the average turnover of the entity for the 2 previous years.A different or additional activity is deemed one that is assigned a different group to the previous one, according to the National Classification of Economic Activities.

    3. It is a asset-holding entity in the terms established in article 5.2 of the LIS.

    4. The entity has been removed from from the index of entities for failing to file a corporate income tax return for three consecutive tax periods (Article 119.1 b) of the LIS).