Compensation of dues for cooperative losses

Regulation: Article 24 Law 20/1990

In relation to the compensation of losses from previous tax periods, it should be noted that cooperative societies, in application of their special tax regime do not compensate negative tax bases in the terms of article 26 of the LIS , but rather negative quotas from previous tax periods.

1. Limits on the compensation of negative quotas

As regards the quantitative limits for the offsetting of negative quotas, article 24.1 of Law 20/1990 establishes that if the algebraic sum of the amounts resulting from applying the corresponding tax rates to the taxable bases, positive or negative, is negative , its amount may be offset by the cooperative with the positive full quotas of the following tax periods, taking into account the following limits:

• Cooperative societies with a net turnover of less than 20 million euros during the 12 months prior to the start date of the tax period may offset negative integral quotas up to a limit of 70 percent of the integral quota prior to offsetting it.

• Cooperative societies with a net turnover of at least 20 million euros during the 12 months prior to the start date of the tax period, the Eighth Additional Provision of Law 20/1990 establishes that the limit of 70 percent of article 24.1 of the aforementioned Law 20/1990, will be replaced by 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 limitation on the compensation of negative quotas will not apply to the amount of income corresponding to reductions and waiting periods as a result of an agreement with creditors not related to the taxpayer.

In any case the full amounts will be offset in the tax period by the amount resulting from multiplying 1 million euros by the average tax rate of the entity, whatever the net amount of the turnover.

As regards the time limit for offsetting negative quotas, negative integral quotas may be offset with positive integral quotas from the following tax periods without any time limit.

2. Administration checks

As established in article 24.1 of Law 20/1990, the right of the Administration to verify the negative quotas compensated or pending compensation will expire after 10 years counting from the day following the end of the period established to present the Corporate Tax return corresponding to the tax period in which the right to its application was generated.

After said period, the cooperative society must prove the negative quotas whose compensation it seeks, by exhibiting the Tax declaration and the accounting, with proof of its deposit during the aforementioned period in the Commercial Registry.

3. Completion of form 200 (page 22)

Box [00561] "Compensation of contributions for cooperative losses" on page 14 of form 200 shall be completed exclusively when the reporting entity is a cooperative society whose previous full contribution for the year (box [00560]) is positive , provided that it has pending compensation for any previous full contribution of negative sign from previous years and its compensation, in whole or in part, is decided in this declaration.

The amount to be entered in box [00561] will be the result of completing the breakdown table "Quota compensation details" on page 22 of form 200.

In this table, cooperative societies must detail for each year from which the negative quotas come, the amount pending compensation .

In application of the above, in box [00561] "Compensation of quotas for cooperative losses" on page 14 of form 200, cooperative societies must record the total amount of the quotas compensated in this settlement, taking into account the following limits:

• When in the 12 months prior to the date on which the tax period begins the net amount of the turnover is less than 20 million euros, cooperative societies must apply the limit of 70 percent on the result of subtracting from the previous full quota (box [00560]), the income corresponding to the reversal of impairments (box [01510]). To the result of this operation, box [01510] will be added to obtain the amount to be entered in box [00561] "Compensation of quotas for cooperative losses":

  Box [00561] = 70% x (box [00560] + box [00210] - box [00480] + box [00408] - box [01037] - box [01510]) + (box [01510])

• When in the 12 months prior to the date on which the tax period begins the net amount of turnover is at least 20 million euros, but less than 60 million euros, cooperative societies must apply the limit of 50 percent on the result of subtracting from the previous full quota (box [00560]), the income corresponding to the reductions by agreement with unrelated creditors (box [00593]) and the reversal of impairments (box [01510]). To the result of this operation, boxes [00593] and [01510] will be added to obtain the amount to be entered in box [00561] "Compensation of quotas for cooperative losses":

  Box [00561] = 50% x (box [00560] + box [00210] - box [00480] + box [00408] - box [01037] - box [00593] - box [01510]) + (box [01510] + box [00593])

• When in the 12 months prior to the date on which the tax period begins the net amount of the turnover is at least 60 million euros, cooperative societies must apply the limit of 25 percent on the result subtracting from the previous full quota (box [00560]), the income corresponding to the reductions by agreement with unrelated creditors (box [00593]) and the reversal of impairments (box [01510]). To the result of this operation, boxes [00593] and [01510] will be added to obtain the amount to be entered in box [00561]:

  Box [00561] = 25% x (box [00560] + box [00210] - box [00480] + box [00408] - box [01037] - box [00593] - box [01510]) + (box [01510] + box [00593])