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Practical Handbook for Companies 2021

Deduction for internal double taxation of previous periods applied in the financial year (DT 23.1 LIS)

The paragraph 1 of the twenty-third transitory provision of the LIS establishes a transitional regime to determine the deduction to avoid double internal taxation on dividends obtained from the participation in the capital or equity of entities resident in Spanish territory, acquired in tax periods prior to 1 January 2015.

Filling in form 200

In application of the provisions of section 1 of the twenty-third transitory provision of the LIS, in the box [01344] "Deduction for internal double taxation of previous periods applied in the tax year (DT 23ª.1 LIS)" on page 14 of form 200, the balance pending deduction for insufficient gross tax liability, corresponding to the deductions to avoid internal double taxation referred to in section 1 of the twenty-third transitory provision of the LIS generated in tax periods prior to 1 January 2015, which has been applied by the taxpayer in the tax period being declared, shall be entered.The amount entered in this box shall be the amount resulting from completing the breakdown table on page 15 of Form 200 explained below.

Completion of the table "Internal double taxation deductions (DT 23ª.1 LIS)" (page 15 of form 200).

Taxpayers who apply this deduction for internal double taxation should complete in this table the block "D.I. internal previous years" as follows:

  • The rows "Internal D.I. 2015", "Internal D.I. 2016", "Internal D.I. 2017", "Internal D.I. 2018", "Internal D.I. 2019" and "Internal D.I. 2020", are intended to collect the amounts of the deductions to avoid internal double taxation regulated in the twenty-third transitory provision of the LIS generated in 2015, 2016, 2017, 2018, 2019 and 2020, and which were transferable to subsequent tax periods due to insufficient gross tax liability.

    The row "Internal I.D. 2021(*)" should only be completed if the entity has deductions pending to be applied corresponding to a previous tax period starting in 2021.

  • In the column "Deduction pending" it should be noted that, if it is a deduction generated in any of the tax periods prior to the one being settled and started in 2015, 2016, 2017, 2018, 2019, 2020 or 2021 of the block "D.I. internal prior years", the balance of the corresponding deduction that was pending application at the start of the tax period being settled should be entered in the respective box of this column.

    In any case, this balance must be the balance corresponding to the tax rate of the tax period in which the deduction was generated.

  • Therefore, in the column "Tax rate/period of generation" the tax rate at which the reporting entity and beneficiary of the deduction was taxed in the period in which the deduction was generated shall be stated.This column does not exist for cases where the tax period of generation of the deduction corresponds to the tax period of the settlement.

  • In the column 2021 pending deduction" the amounts referring to pending deductions from previous years should be included.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".

    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 tax period under assessment 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 in the column "2021 deduction pending".

  • The column "Applied in this settlement" shall contain the part (or all, if applicable) of the amount corresponding to the previous column "2021 pending deduction" which is applied in the settlement for the period being settled.

    To be taken into account:

    • 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.

      For these purposes, prior to filling in this table "Internal double taxation deductions (DT 23ª LIS)" (except in cases where the table on page 21 of form 200 has already been filled in), a breakdown window will open in which the taxpayer must indicate whether the net turnover during the twelve months prior to the start date of the tax period has been less than 20 million euros, at least 20 million euros, but less than 60 million euros or at least 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.

    • In the box [01344] the total of the amounts entered in the column "Applied in this tax assessment" shall be included, which shall be transferred to page 14 of form 200 relating to the tax assessment.

  • In the column "Pending application in future periods" the part of the corresponding deduction from the column "2021 pending deduction" that was not included in the box corresponding to the column "Applied in this settlement" shall be included. 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.