Practical example of deductions

Company "A" whose financial year lasts twelve months and coincides with the calendar year, has the following data when submitting its Corporate Tax return for the 2021 financial year:

1. The full quota, less deductions for double taxation and bonuses (box [00582] "Positive adjusted full quota" on page 14 of form 200), is 100,000 euros.

2. The following deductions from previous periods are pending application:

   • Fiscal year 2014: By investment of benefits: 20,000 euros.

   • Fiscal year 2015: For research and development expenses: 2,000 euros.

   • Fiscal year 2016: For donations to UNICEF : 1,000 euros.

   • Fiscal year 2017 For job creation for workers with disabilities: 3,300 euros.

   • Fiscal year 2018: For their participation in the Universo Mujer Program: 1,800 euros.

   • Fiscal year 2019: For expenses on technological innovation: 2,500 euros.

3. During fiscal year 2021, it has made investments in the Canary Islands for the acquisition of tangible fixed assets that, in accordance with the provisions of Law 20/1991, give the right to a deduction in the amount of 2,000 euros.

4. The amount of the deduction for research and development activities corresponding to expenses and investments made in fiscal year 2021 amounts to 21,000 euros (exceeds 10 percent of the full 2021 quota reduced by deductions to avoid double taxation and bonuses) . In fiscal year 2021, it does not make investments in technological innovation.

Solution:

Positive adjusted full rate (box [00582]): 100,000 euros

Application of deductions:

• For investment of 2014 profits (pending balance): 20,000

  Applies: 20,000

• For research and development expenses 2015 (pending balance): 2,000

  Applies ⁽¹⁾: 2,000

• For donations to UNICEF 2016 (pending balance): 1,000

  Applies: 1,000

• For job creation for workers with disabilities 2017 (pending balance): 3,300

  Applies ⁽¹⁾: 3,300

• For their participation in the Universo Mujer 2018 program (balance pending): 1,800

  Applies ⁽¹⁾: 1,800

• For expenses on technological innovation 2019 (pending balance): 2,500

  Applies ⁽¹⁾: 2,500

• For investments in the Canary Islands made andn 2021: 2,000

  Applies ⁽²⁾: 2,000

• For research and development expenses 2021 : 21,000

  Applies ^{(1) (3)}: 20,400

Positive liquid quota calculation :

Full amount, reduced by deductions for double taxation and bonuses = 100,000 euros

(-) Deductions applied = 53,000 euros

Positive liquid quota (box [00582]) = 47,000 euros

Notes to the example:

⁽¹⁾ The joint limit of deductions in Chapter IV of Title VI of the LIS amounts to 50,000 euros. In accordance with the provisions of article 39 of the LIS is raised from 25 percent to 50 percent of the full positive adjusted quota, exceeding the amount of the deduction for research activities. and technological development and innovation of 10 percent of said amount. ^{(return research 2015) (return creation) (return participation) (return innovation) (return research 2020)}

⁽²⁾ The applicable limit according to Law 20/1991 amounts to 50 percent of the full positive adjusted quota (50,000 euros). ^(Back)

⁽³⁾ This deduction cannot be applied in its entirety because it exceeds the aforementioned joint limit. ^(Back)

Completion of the Tax return for fiscal year 2021 (tables pages 16 bis, 17 and 18 of form 200)

Investment deductions in the Canary Islands with increased limits

Total	[00886]	2,000	[00590]	2,000	[00887]	0
Deductions	Pending deduction generated		Applied in this settlement		Pending application in future years
2021: Investments in the Canary Islands (Law 20/1991)	[00217]	2,000	[00218]	2,000	[00219]	0

Deductions to encourage certain activities
( Chap. IV Title VI, DT 24.3 LIS and art. 27.3 first Law 49/2002)

Total	[00831]	51,600	[00588]	51,000	[00832]	600
Deductions	Pending deduction generated		Applied in this settlement		Pending application in future years
2014: Add deductions Ch. IV Title VI Law 43/95 and RDLeg. 4/2004	[01063]	20,000	[01064]	20,000	[01065]	0
2015: Research and development (CT)	[00986]	2,000	[00810]	2,000	[00507]	0
2016: Add deductions Ch. IV Title VI Law 43/95, RDLeg. 4/2004 and LIS (except R&D&i)	[01614]	1,000	[01615]	1,000	[01616]	0
2017: Add deductions Ch. IV Title VI Law 43/95, RDLeg. 4/2004 and LIS	[01847]	3,300	[01848]	3,300	[01849]	0
2018: Add deductions Ch. IV Title VI Law 43/95, RDLeg. 4/2004 and LIS (except R&D&i)	[02218]	1,800	[02219]	1,800	[02220]	0
2019: Technological innovation (IT)	[02359]	2,500	[02360]	2,500	[02361]	0
2021: Research and development (CT)	[00798]	21,000	[00799]	20,400	[00800]	600