# Practical examples

**Example 1:**

**How to apply net financial expenses from previous years**

Entity "A" presents the following data in the tax period:

- Operating Profit (BO): €100 million
- Financial expenses (GF):

As established in article 16.1 of the LIS , the entity can deduct net financial expenses with a limit of 30 percent of the operating profit for the year; The net financial expenses of the tax period amounting to 1 million euros being deductible in any case.

#### Maximum limit:

**Year 0:**

**Year 1:**

**Year 2:**

€ million | Financial expenses net | Limit | Financial expenses net deductible | Limit exercises following | Pending financial expenses |
---|---|---|---|---|---|

Year 0 |
80 | 30 | 30 | --- | 50 |

Year 1 |
20 | 30 | 20 + 10 | --- | 40 |

Year 2 |
40 | 30 | 30 | --- | 40 + 10 |

**Example 2:**

**How to add unused operating profit to future years**

Entity "B" presents the following data in the tax period:

- Operating Profit (BO): €100 million
- Financial expenses (GF):

#### Maximum limit:

**Year 0:**

**Year 1:**

**Year 2:**

€ million | Financial expenses net | Limit | Financial expenses net deductible | Limit exercises following | Pending financial expenses |
---|---|---|---|---|---|

Year 0 |
20 | 30 | 20 | 10 | --- |

Year 1 |
10 | 30 | 10 | 20 + 10 | --- |

Year 2 |
60 | 30 + 30 | 60 | --- | --- |

**Example 3:**

**How to apply the limit of 1 million euros**

Entity "C" presents the following data in the tax period:

- Annual Operating Profit (BO) for each tax period: €2 million
- Financial expenses (GF):

#### Maximum limit:

**Year 0:**

**Year 1:**

**Year 2:**

€ million | Financial expenses net | Limit | Financial expenses net deductible | Limit exercises following | Pending financial expenses |
---|---|---|---|---|---|

Year 0 |
0.8 | 1 | 0.8 | --- | --- |

Year 1 |
1.1 | 1 | 1 | --- | 0.1 |

Year 2 |
0.8 | 1 | 0.8 + 0.1 | --- | --- |