Deduction amount
Regulation: Article 20 Law 49/2002
Taxpayers will have the right to deduct from the full quota, reduced by the deductions and bonuses provided for in Chapters II, III and IV of Title VI of the LIS , the 35 percent of the deduction base.
The amounts corresponding to the tax period not deducted may be applied in the settlements of the tax periods that end in the 10 immediate and successive years .
If in the two immediately preceding tax periods donations, donations or contributions with the right to deduction had been made in favor of the same entity for an amount equal to or greater, in each of them, than the previous tax period, the percentage of deduction applicable to The base of the deduction in favor of that same entity will be 40 percent .
The base of this deduction may not exceed 10 percent of the tax base for the tax period.
Amounts that exceed this limit may be applied in tax periods ending in the immediate 10 years and successive .
Note:
article 22 of Law 49/2002 establishes that the General State Budget Law may establish a relationship of priority patronage activities and beneficiary entities . In relation to these activities and beneficiary entities, the General State Budget Law may increase by five percentage points , at most, the percentages and limits of the deduction for donations of Law 49/2002 . For these purposes, the percentage of 35 percent applicable to this deduction may be raised to 40 percent and the percentage increased from 40 percent to 45 percent. Additionally, the maximum limit of 10 percent of the tax period's impossible basis will be raised to 15 percent .
Example:
Ask:
Company "A" has made the following donations to the same foundation to which the special regime provided for in Law 49/2002 applies.
In fiscal year 2021, can company "A" apply the increased percentage established in article 20 of Law 49/2002 on the basis of deduction?
Answer:
In the second paragraph of article 20 of Law 49/2002, it is established that the increased percentage of deduction will be applied if in the two immediately preceding tax periods donations, donations or contributions with the right to deduction have been made in favor of the same entity for amount equal to or greater, in each of them, than the previous tax period.
In accordance with the above, in fiscal year 2021 the amounts donated in fiscal years 2020 and 2019 must be taken into account, but also those made in fiscal year 2018, to the extent that the rule requires that in the two immediately preceding tax periods had made donations in favor of an entity for an amount equal to or greater than that of the previous tax period (in this case, with respect to 2019, the donations made in the previous year, that is, 2018, would have to be analyzed).
Therefore, since in fiscal year 2018 company "A" did not make any donation, in fiscal year 2021 it will not be able to apply the increased percentage of deduction provided for in article 20 of Law 49/2002 to the donation made in said fiscal year.
In addition to what is indicated in the previous paragraph in relation to fiscal year 2018, company "A" must take into account that for the application in fiscal year 2021 of the increased rate of deduction, it is necessary that in fiscal years 2019 and 2020, donations in favor of the same entity for an amount equal to or greater, in each of them, than the previous year. Regarding the donation made in fiscal year 2021, it is not required for the application of the increased rate that it be higher than that made in 2020.