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Practical Handbook for Companies 2021

Deduction for internal double taxation of previous periods applied in the financial year (article 30 RDLeg.4/2004)

The paragraph 4 of the twenty-third transitory provision of the LIS establishes that the deductions for double taxation established in articles 30, 31 and 32 of the RDLeg. 4/2004, as currently in force in tax periods commenced prior to 1 January 2015, pending application at the entry into force of this Law, as well as those deductions generated by application of this Provision that have not been deducted due to insufficient tax liability, may be deducted in subsequent tax periods.

Filling in form 200

Applying this concept, in box [00570] "Deduction for domestic double taxation from previous periods applied during the financial year (Art. 30 Royal Legislative Decree4/2004)" on page 14 of form 200, the balance pending deduction due to insufficiency of full tax liability, relating to deductions to avoid internal double taxation generated in previous tax periods (2008, 2009, 2010, 2011, 2012, 2013 and 2014) shall be entered in accordance with the provisions of article 30 of RDLeg.4/2004, applied by the taxpayer during the reporting period.The amount entered in this box shall be the amount resulting from completing the breakdown table on page 15 of Form 200 explained below.

The amount of this deduction shall be determined taking into account the tax rate in force in the tax period in which it is applied.

Filling in the table "Domestic double taxation deductions Royal Legislative Decree4/2004” (page 15 of Form 200)

Taxpayers applying this domestic double taxation relief should complete this table as follows:

  • Under "Domestic double taxation: previous years", rows “Domestic double taxation 2008", "Domestic double taxation 2009", "Domestic double taxation 2010", "Domestic double taxation 2011", "Domestic double taxation 2012", "Domestic double taxation 2013" and "Domestic double taxation 2014" are available to enter domestic double taxation deductions pursuant to the provisions of Article 30 of Royal Legislative Decree4/2004, generated in 2008, 2009, 2010, 2011, 2012, 2013 and 2014, respectively, and that could be carried forward to future tax periods due to the insufficiency of the tax liability.

  • In the column "Deduction pending" it should be noted that, if there is a deduction generated in any of the tax periods prior to the period in question, starting in 2008, 2009, 2010, 2011, 2012, 2013 or 2014, in the block "Domestic double taxation for prev.years”, enter the balance of the corresponding deduction outstanding at the start of the tax period in question in the corresponding box in this column.In any case, this balance must be that relating to the tax rate of the tax period in which the deduction was generated.

  • Therefore, column "Tax rate/g1eneration period” will show the rate for which the declaring and beneficiary taxpayer of the deduction were taxed in the tax period in which the deduction was generated.

  • The column "2021 Deduction pending" contains the amounts relating to deductions pending from previous years.In the event that the tax rate applicable by the taxpayer benefiting from the deduction in the tax period in which the deduction was generated is different from the tax rate applicable in the tax period under assessment (shown in the row "Tax rate 2021"), the amount to be entered in this column will be the result of multiplying the amount in the corresponding box in the column "Deduction pending" by the fraction"Tax rate 2021/Tax rate generation period".

    To this end, bear in mind that section 4 of transitory provision twenty-three of the Corporation Tax Law indicates that the amount of the deductions established in said transitory provision and in Articles 30, 31.1 b) and 32.3 of Royal Legislative Decree4/2004, shall be determined taking into account the tax rate in force in the tax period in which it is applied.

    A tener en cuenta:

    In general, the tax rate for the financial year 2021 will be obtained by dividing the amount in box [00562] "Full tax liability" on page 14 of form 200 by the amount in box [00552] "Taxable base" on page 13 of form 200.

    If the tax rate of the settlement period and the tax rate of the generation period are equal, the amount entered in the column "Deduction pending" shall be equal to the amount entered in the corresponding box of the column "2021 deduction pending".

  • In the column "Applied in this settlement" the part (or the totality if applicable) of the corresponding amount in the column "2021 pending deduction" that is applied in the settlement of the tax period being declared shall be included.

    A tener en cuenta:

    • When filling in this column, it should be taken into account that the application of this deduction has as limit the amount of the full tax liability appearing in box [00562] "Full tax liability" on page 14 of form 200.

      For tax periods beginning on or after 1 January 2016, paragraph 2 of the fifteenth additional provision of the LIS establishes that taxpayers whose net turnover is at least 20 million euros during the 12 months prior to the date on which the tax period begins must take into account that the amount of the deductions to avoid international double taxation provided for in articles 31, 32 and section 11 of article 100 of the LIS, as well as those deductions to avoid double taxation referred to in the twenty-third transitory provision of this Law, may not exceed a combined total of 50 percent of the taxpayer's gross tax liability.

    • For tax periods commencing on or after 1 January 2019, information on the net turnover for the twelve months prior to the start date of the tax period must be included on page 21 of form 200, for the purposes of determining the application of the limit established in DA 15ª of the LIS.

      To this end, before filling in this table "Domestic double taxation deductions Royal Legislative Decree4/2004" (except in cases where the table on page 21 of form 200 has already been filled in), a breakdown window will open up in which the taxpayer must indicate whether the net revenues during the twelve months prior to the start date of the tax period were less than 20 million euros, more than 20 million euros but less than 60 million euros or more than 60 million euros.The option marked by the taxpayer shall be transferred to the table "Net turnover for the twelve months prior to the date of commencement of the tax period" on page 21 of form 200.

      The option marked by the taxpayer will also be taken into account to determine the limits in the calculation of the accounting corrections derived from the application of article 11.12 of the LIS, the offsetting of tax losses and the offsetting of contributions for losses of cooperatives, so that once the table on page 21 of form 200 has been completed, it will not be shown again on other screens.

    • The sum of the boxes that make up this column shall be included in box [00570] and shall be transferred to box [00570] on page 14 of form 200 as regards the tax settlement.

  • The corresponding part of the deduction from the column "2021 pending deduction" that has not been transferred to the column "Applied in this settlement" shall be taken from the column "2021 pending deduction" in the column "To be applied in future periods". In other words, it refers to the part of the deduction which, because it has not been applied in the settlement of the tax period being declared, remains to be applied in future tax periods.

    A tener en cuenta:

    For tax periods starting on or after 1 January 2015, no deductions can be generated to avoid domestic double taxation, as the new corporation tax regulations establish a single exemption system for dividends and capital gains generated by equity investments for entities residing and not residing in Spain.

    However, for tax periods starting on or after 1 January 2015, pursuant to the provisions of section 4 of transitory provision twenty-three of the Corporation Tax Law, the double taxation deductions established in Articles 30, 31 and 32 of Royal Legislative Decree4/2004, generated in tax periods starting before 1 January 2015, pending application in the first tax period starting on or after that date.

    Therefore, in this section on "Deductions for domestic double taxation Royal Legislative Decree4/2004", the amounts of these tax returns that have been or may be carried forward to future tax periods shall be entered.