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Practical Handbook for Companies 2021

Deductions excluded from the R&D&I limit (art. 39.2 LIS)

Entities to which the general tax rate provided for in paragraph 1 or paragraph 6 of article 29 of the LIS, , applies may opt to exclude from the joint limits established in the last paragraph of article 39.1 of the LIS (25/50 per cent), applying instead a discount of 20 per cent of their amount, to the deductions for research and development and technological innovation activities referred to in paragraphs 1 and 2 of article 35 of the LIS, under the terms established in article 39.2 of the LIS.

In the case of insufficient tax liability, may request its payment to the tax authorities through the tax return, once at least one year has elapsed since the end of the tax period in which the deduction was generated, without the deduction having been applied.This payment shall be governed by the provisions of Article 31 of Law 58/2003, of 17 December, General Tax, and in its development regulations, without, in any case, the payment of interest of delay referred to in Article 31.2 of that Law.

Remember:

To exercise the option for the exclusion of the joint limit on deductions for research and development activities, applied with a 20 per cent discount, and to request payment to the tax authorities in the event of insufficient tax liability under the terms established in article 39.2 of the LIS, you must first tick box [00059] "Opciones arts.39.2 and 39.3 LIS" from page 1 of Form 200.

In accordance with Article 39.2 of the LIS, the amount of the deduction applied or paid:

  • Together, they may not exceed the amount of 1 million euros per year, in the case of technological innovation activities.

  • 3 million per year for all items 3 million per year, in the case of research and development and technological innovation activities.

Both limits shall apply to the whole group of companies, in the case of entities forming part of the same group according to the criteria set out in Article 42 of the Commercial Code, irrespective of their residence and of the obligation to prepare consolidated annual accounts.

Additionally, in the event that the research and development expenses of the tax period exceed 10 percent of the net turnover of the same, the deduction provided for in Article 35.1 of the LIS generated in that tax period may be excluded from the limit established in the last paragraph of the previous section, and applied or paid with a discount of 20 percent of its amount in the first tax return filed at least one year after the end of the tax period in which the deduction was generated, without it having been applied, up to an additional amount of 2 million euros.