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Practical Handbook for Companies 2021

Determination of the taxable base and the gross tax liability under the individual taxation scheme, for the application of the limits established in Articles 67, sections c), d) and e), and 71.2 of the LIS

In accordance with Article 67 e) of the LIS, the tax losses of any entity pending offset at the time of its integration into the tax group may be offset against the taxable income of the group, up to a limit of 70 per cent of the individual taxable income of the entity itself, taking into account the eliminations and additions that correspond to that entity.

For tax periods commencing on or after 1 January 2016, the fifteenth additional provision of the LIS establishes that taxpayers whose net turnover is at least 20 million euros during the 12 months prior to the date on which the tax period commences will replace the limit established in letters d) and e) of article 67 of the LIS with the following:

  • 50 per cent, if the net turnover in the 12 months in question is at least EUR 20 million but less than EUR 60 million.

  • The 25 per cent, when in the 12 months in question the net turnover is at least 60 million euros.

Therefore, for tax periods commencing on or after 1 January 2017, taxpayers to whom the fifteenth additional provision of the LIS does not apply must apply the 70 per cent limit established in article 67 e) of said Law.

On the other hand, article 71.2 of the LIS establishes that the deductions of any entity pending application at the time of its inclusion in the tax group may be deducted from the gross tax liability of the tax group up to the limit that would have corresponded to that entity in the individual tax regime, taking into account the eliminations and incorporations that correspond to that entity, in accordance with the provisions of articles 64 and 65 of the LIS.

In short, in order to determine the amount of tax losses to be offset and deductions to be applied in the period, generated by an entity prior to its incorporation into the group, it is necessary to determine the individual taxation of the entity using group criteria, taking into account the eliminations and incorporations.

To determine the individual settlement of the entity with group criteria, the settlement should be continued from box [01029] on page 13 of Form 200.So, starting from the individual taxable income taken into account for the calculation of the taxable income of the group, box [01029], the eliminations and additions corresponding to the entity, box [01030], and the individual integration of the allocations of article 11.12 of the LIS, box [01031], whose completion has not been possible on page 12 of form 200 (boxes [00415], [00211], [00416] and [00543]), must be added.

The result will determine the taxable income before offsetting the negative taxable income in box [00550], and from there the self-assessment of the positive net tax liability will be completed, i.e. box [00592] on page 14 of form 200, always respecting the group criterion.