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Practical Manual for Companies 2022.

Integration into the taxable base of non-deductible expenses for tax purposes

Article 11.12 of the LIS establishes that provisions for impairment of credits or other assets arising from possible insolvencies of debtors not related to the taxpayer, not owed by public law entities and whose deductibility does not occur by application of the provisions of article 13.1.a) of this Law, as well as those derived from the application of sections 1 and 2 of article 14 of this Law, corresponding to provisions or contributions to social security systems and, where appropriate, early retirement, which have generated deferred tax assets, to which the right established in article 130 of this Law applies, will be integrated into the tax base in accordance with the provisions of this Law, with the limit of 70 percent of the positive tax base prior to its integration, to the application of the capitalization reserve established in article 25 of This Law already provides for the compensation of negative tax bases.

This article regulates the integration into the tax base of a series of expenses that were not tax deductible in the tax period in which they were accounted for by applying the imputation criteria established by the Corporate Tax regulations, and which for that reason, generated deferred tax assets likely to become a payable credit against the Tax Authority. The inclusion of these non-tax-deductible expenses in the tax base must be carried out taking into account the limits explained in the following section.

Filling in form 200

In order to include these non-tax deductible expenses in the tax base as established in article 11.12 of the LIS, a series of adjustments must be made that will be recorded in boxes [ ] and [00211] "Impairment losses of art. 13.1 LIS and provisions and expenses (arts. 14.1 and 14.2 LIS) referred to in art. 11.12 and DT 33.1 LIS» on page 12 of form 200:

  • In box [00415] of increases, the amount of the provisions referred to in article 11.12 of the LIS that are considered accounting expenses in the tax period subject to declaration must be recorded, but that are not tax deductible as provided for in articles 13.1.a), 14.1 and 14.2 of the LIS.

  • When in subsequent tax periods the circumstances set out in articles 13.1.a), 14.1 and 14.2 of the LIS occur for these expenses to be tax deductible , a negative adjustment must be made in box [00211] .

    Keep in mind:

    Information on the net amount of turnover for the twelve months prior to the start date of the tax period must be included on page 1 of Form 200, in order to determine the application of minimum taxation (Article 30 bis LIS) and the limits established in Article 11.12 of the LIS.

    The option selected by the taxpayer will also be taken into account to determine the limits for calculating the compensation of negative tax bases, the compensation of negative quotas for losses of cooperatives and deductions for double taxation, so once the table on page 1 of form 200 has been completed, it will not be displayed again on other screens.

    Remember:

    In these boxes [00415] and [00211] "Impairment losses under art. 13.1 LIS and provisions and expenses (arts. 14.1 and 14.2 LIS) referred to in art. 11.12 and DT 33.1 LIS» the provisions referred to in article 11.12 of the LIS must be recorded, but without taking into account the limits of integration in the taxable base of these expenses established in said article. These limits will be included in boxes [00416] and [00543] ## "Application of the limit of art. 11.12 LIS to impairment losses of art. 13.1 LIS and provisions and expenses (art. 14.1 and 14.2 LIS)" on page 12 of form 200, in the manner explained in the following section.

    These boxes [00415] and [00211] should not be completed by cooperative societies , which will instead complete boxes [00210] and [00480] "Impairment losses under art. 13.1 LIS and provisions and expenses (art. 14.1 and 14.2 LIS) referred to in art. 11.12 LIS (converted into a share)" on page 14 of form 200.