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Practical Manual for Companies 2022.

Limits on inclusion in the taxable base of non-deductible expenses for tax purposes at the time they are recorded in the accounts

As we have already seen in the previous section, expenses that were not deductible in the tax period in which they were recorded, as referred to in article 11.12 of the LIS , will be integrated into the tax base of the tax period in which the conditions for tax deductibility are met in accordance with the provisions of the Corporate Tax regulations, taking into account the following limits :

  1. As provided in the first paragraph of article 11.12 of the LIS , these expenses 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, the application of the capitalization reserve established in article 25 of this Law and the compensation of negative tax bases.

    In relation to the 70 percent limit, the Additional Provision of the LIS establishes that, for tax periods beginning on or after January 2016, taxpayers whose net turnover is at least 20 million euros during the 12 months prior to the date on which the tax period begins, will replace said limit with the following:

    • 50 percent , when in the referred 12 months the net amount of the turnover is at least 20 million euros, but less than 60 million euros.

    • 25 percent , when in the referred 12 months the net amount of the turnover is at least 60 million euros.

    The amounts not integrated in a tax period will be subject to integration in the following tax periods with the same limit. For these purposes, the provisions corresponding to the oldest tax periods will be integrated first.

  2. For tax periods beginning on or after January 1, 2016 , in accordance with the provisions of article 130.1 and the thirty-third transitional provision of the LIS , the limit established in article 11.12 of the LIS for the integration into the tax base of expenses that were not tax deductible in the tax period in which they were recorded, will only apply to those that generated deferred tax assets that may be converted into a credit with the Tax Authority, for an amount equal to the positive net quota corresponding to the tax period in which those expenses were generated.

Filling in form 200

The application of the limit established in article 11.12 of the LIS in the integration into the tax base of these expenses that were not deductible in the tax period in which they were recorded and that generated deferred tax assets, gives rise to the realization of adjustments that will be recorded in boxes [ ] and [00543] "Application of the limit of art. 11.12 LIS, to the impairment losses of art. 13.1 LIS and provisions and expenses (arts. 14.1 and 14.2 of the LIS)» on page 12 of form 200:

  • In the tax period in which these expenses are tax deductible, in addition to recording their amount in box [00211] , box [00416] must be completed with the amount of these expenses whose deductibility is not applicable in said period because it exceeds the limit provided for in the first paragraph of article 11.12 of the LIS. That is, in box [00416] the difference between the amount entered in box [00211] and the amount corresponding to the limit provided for in said article must appear.

  • Regarding expenses that have not been included in the tax base in the tax period that were deductible for exceeding the limit established in the first paragraph of article 11.12 of the LIS, they must be included in the following immediate tax periods in box [00543] , also taking into account the same limit. For this purpose, the second paragraph of article 11.12 of the LIS establishes that the provisions corresponding to the oldest tax periods will be integrated first.

    Keep in mind:

    Boxes [00416] and [00543] "Application of the limit of art. 11.12 LIS, to the impairment losses of art. 13.1 LIS and provisions and expenses (arts. 14.1 and 14.2 of the LIS)» should not be completed by the cooperative societies , which will instead complete the boxes [00408] and [01037] «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 14 of form 200.