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Practical Handbook for Companies 2021

Deduction for reversal of temporary measures (DT 37.1 LIS)

1.Amount of reduction

For tax periods starting on or after 1 January 2015, with a view to mitigating the effects of the reduction in tax rates as part of the limitation on the deduction of depreciation for 2013 and 2014, section 1 of the thirty-seventh transitional provision of the Corporation Tax Law, sets out a new deduction on the gross tax payable for taxpayers who pay tax at the general corporate income tax rate.

Thus, according to the provisions of the aforementioned provision, taxpayers who pay tax at the general tax rate provided for in article 29.1 of the LIS and who have been subject to the limitation on depreciation established in article 7 of Law 16/2012, of 27 December, which adopts various tax measures aimed at consolidating public finances and boosting economic activity, will be entitled to a deduction in the gross tax liability of 5 per cent (2 per cent for tax periods beginning in 2015) of the amounts included in the tax base of the tax period in accordance with the third paragraph of the aforementioned article, derived from the depreciation not deducted in the tax periods that began in 2013 and 2014.

A tener en cuenta:

This deduction will be applied after the other deductions and rebates applicable for corporate income tax purposes, meaning that the joint limit does not apply.

Amounts not deducted due to insufficient tax liability may be deducted in subsequent tax periods, without limitation in time.

2.Filling in form 200

Taxpayers shall enter in the box [01040] "Deduction for reversion of temporary measures DT 37ª.1 LIS" on page 14 of form 200, the amount corresponding to these deductions applied in the tax period being declared.The amount entered in this box shall be the amount resulting from completing the breakdown table on page 19 of Form 200 explained below.

Completion of the table "Deduction for reversal of temporary measures DT 37ª.1 LIS" (page 19 of form 200).

In this table, the amounts of the deduction for the reversal of temporary measures generated in the financial years 2015 to 2021 should be entered as detailed below:

  • In the column "Deduction base" the amounts corresponding to the amounts included in the tax base for the tax years 2015 to 2021, derived from the depreciations not deducted in the tax periods started in 2013 and 2014, and on which the deduction is applied, shall be entered.

  • In the column "Amount generated/pending at the beginning of the period" the amounts derived from applying to the amounts in the columns "Deduction base", the percentage of 2 per cent (for the tax period 2015) and 5 per cent (for the tax periods 2016 to 2021) shall be entered.

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

  • The column "Amount applied" shall contain the amounts corresponding to the amounts entered in the previous column "Amount generated/to be applied at the beginning of the period", which have been applied in the tax period being reported.

    Box [01040] shall contain the total of the amounts entered in the column “Applied in this settlement” to be transferred to Box [01040] on Page 14 of Form 200 concerning the tax settlement.

  • In the column "Amount outstanding" the amounts corresponding to the amounts remaining to be applied for future tax periods shall be entered.