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Practical Handbook for Companies 2021


The first section of the twenty-fourth transitory provision of the LIS establishes that deductions for investments in new tangible fixed assets generated in accordance with Article 26 of Law 61/1978, of 27 December, on Corporate Income Tax, in respect of which the taxpayer has opted to apply them in the tax periods in which the payments are made in accordance with the provisions of Article 218.3 of the Corporate Income Tax Regulations, approved by Royal Decree 2631/1982, of 15 October, will continue to be applied in the tax returns for the tax periods in which the aforementioned payments are made, under the conditions and requirements set out in the aforementioned regulation.

The deductions referred to in the previous paragraph shall be deducted respecting the limit on the net tax liability provided for in the aforementioned Law and in the corresponding General State Budget Laws.

For these purposes the net tax payable shall be understood to be that resulting from reducing the gross tax payable by the deductions and allowances provided for in Chapters II and III of Title VI of the LIS.

Deductions from different tax periods or modalities of Article 26 of Law 61/1978 of 27 December, may not exceed a joint limit of 35 percent of the net tax liability.

The deductions referred to in the preceding paragraphs shall be made after the deductions and allowances established in Chapters II and III of Title VI of the LIS and, subsequently, the deductions established in Chapter IV of Title VI, the limit of which shall be calculated independently of that established in the preceding paragraph.