Completion of the table “Conversion of deferred tax assets into credit payable to the Tax Administration”

Regulation: Article 130, DA 13 and DT 33 LIS

In relation to the procedure for converting deferred tax assets into a claim against the Tax Authority, the taxpayer must complete the table "Conversion of deferred tax assets into a claim against the Tax Authority (art. 130, DA 13 and DT 33 LIS)" on page 20 ter of form 200, as detailed below:

1. Deferred tax assets (DTA). DT 33 and DA 13 LIS

In the -third transitional provision of the LIS a transitional regime is established for the conversion of deferred tax assets generated in tax periods beginning before January 1, 2016 into a claimable credit against the Tax Authority.

This provision establishes a different treatment for the exercise of the right of conversion into a credit payable before the tax authorities regulated in article 130 of the LIS for these assets, according to their generation period:

• Deferred tax assets generated before January 1, 2008

Section 1 of the thirty-third transitional provision of the LIS establishes that these assets will have the right to conversion into a demandable credit before the tax authority regardless of the amount of the positive net quota of the tax period in which they were generated.

• Deferred tax assets generated in the periods between 2008 and 2015

In section 2 of the thirty-third transitional provision of the LIS it is established that in the event that the difference between the amount of the deferred tax assets referred to in section 1 of said provision and the aggregate sum of the positive net quotas of this Tax, corresponding to the tax periods elapsed between the years 2008 and 2015 is positive , the application of the provisions of article 130 of the LIS will require that the entity satisfy, with respect to said difference, the patrimonial benefit for conversion of deferred tax assets into a payable credit against the Administration tax. This benefit must be paid in all tax periods in which the aforementioned deferred tax assets are recorded.

The patrimonial benefit is regulated in the Thirteenth Additional Provision of the LIS, which establishes that the amount of the benefit will be the result of applying 1.5 percent to the total amount of said assets existing on the last day of the tax period corresponding to the Corporate Tax of the entity.

This benefit will be accrued on the day the voluntary declaration period for this Tax begins, its payment period coinciding with that established for the self-assessment and payment of this Tax.

The payment of the patrimonial benefit will be made by submitting the form 221 of self-assessment of the patrimonial benefit for conversion of deferred tax assets into a claimable credit against the Tax Authority, approved by Order HFP /550/2017, of June 15.

Finally, in relation to taxpayers who apply the provisions of this thirty-third transitional provision of the LIS, section 6 of said thirty-third transitional provision of the LIS establishes for these taxpayers the obligation to provide the following information:

1. Total amount of deferred tax assets referred to in section 1 of this provision.

2. Total amount of the aggregate sum of the positive net quotas of this Tax, corresponding to the tax periods between 2008 and 2015.

3. Total amount and year of generation of the deferred tax assets referred to in letter a) above, to which, in turn, section 2 of this provision applies.

4. Total amount and year of generation of the deferred tax assets referred to in letter a) above to which section 2 of this provision does not apply, specifying, where applicable, those derived from the application of section 4 of this provision.

Completion of the section "Deferred tax assets (AID). DT 33 and DA 13 LIS" in form 200 (page 20 ter of form 200)

To comply with the obligation mentioned in the previous paragraphs, taxpayers must complete this section in the manner detailed below:

• In column “Total amount of deferred tax assets pending application at the beginning of the period (DT 33.1 and 6 a) LIS)” the total amount of deferred tax assets generated in the tax periods 2007 and previous and in those between 2008 and 2015, respectively, that are pending application at the beginning of the tax period being declared, shall be entered in the boxes corresponding to the rows “2007 and previous” and “Total 2008 to 2015”. The same shall apply to all deferred tax assets generated in the tax periods 2007 and previous and in those between 2008 and 2015, respectively, that are pending application at the beginning of the tax period being declared, in accordance with the terms established in section 1 and in letter a) of section 6 of the thirty-third transitional provision of the LIS.

• In column "Positive net quota" the amount of the aggregate sum of the positive net quotas of the Corporate Tax for the tax periods between 2008 and 2015 will be entered in the box corresponding to the row "Total 2008 to 2015".

  Keep in mind:

  The box corresponding to the row "2007 and earlier" is blocked from being filled in, because according to the provisions of section 1 of the thirty-third transitional provision of the LIS, the right to convert deferred tax assets generated in those periods can be exercised regardless of the amount of the positive net quota of the period in which they were generated.

  The completion of the box corresponding to the total of this column is also blocked.

• In column “AID applied in the period (by integration of provisions in the settlement)” and earlier” and “Total 2008 to 2015”.

• In column “AID converted into payable credit in the period” the amount of deferred tax assets generated before January 1, 2008 and in the periods between 2008 and 2015, respectively, converted into payable credit in the tax period subject to declaration in the terms established by article 130 of the LIS, shall be entered in the boxes corresponding to the rows “2007 and prior” and “Total 2008 to 2015”.

Within this section "Deferred tax assets (AID). DT 33 and DA 13 LIS», in block «AID pending application in future periods» , the amounts corresponding to the deferred tax assets that have not been applied or converted in the tax period subject to declaration and that, therefore, remain pending application in future periods will be recorded:

• In column "With patrimonial benefit (DT 33.6 c) LIS)" , the total amount of deferred tax assets recorded in the column "Total AID amount pending application at the beginning of the period (DT 33.1 and 6 a) LIS)" will be recorded, from which those amounts corresponding to the deferred tax assets that have been applied in the period (by integration of provisions in the liquidation) and the deferred tax assets converted into payable credit in the period, must be deducted, the amount on which the patrimonial benefit must be paid by conversion of said assets in the terms established in section 2 of the thirty-third transitional provision of the LIS.

  For these purposes, the amount on which the capital benefit is to be paid for the conversion of deferred tax assets generated in the tax periods between 2008 and 2015 will be entered in the box corresponding to the row "Total 2008 to 2015".

  Keep in mind:

  The box corresponding to the row "2007 and earlier" must be filled out because, according to the provisions of the thirty-third transitional provision of the LIS, deferred tax assets generated in years prior to January 1, 2008, may be converted into a payable credit without having to satisfy the patrimonial benefit.

• In column "Without patrimonial benefit (DT 33.6 d) LIS)" will be recorded from the total amount of deferred tax assets recorded in the column "Total AID amount pending application at the beginning of the period (DT 33.1 and 6 a) LIS)", from which those amounts corresponding to the deferred tax assets that have been applied in the period (by integration of provisions in the liquidation) and the deferred tax assets converted into payable credit in the period, must be deducted, the amount on which the patrimonial benefit does not correspond to be paid by conversion of said assets in the terms established in sections 1 and 2 of the thirty-third transitional provision of the LIS.

  For these purposes, the boxes corresponding to the rows "2007 and earlier" and "Total 2008 to 2015" will record the entire amount on which the capital benefit for conversion of deferred tax assets generated in the tax periods beginning before January 1, 2008 and between 2008 and 2015, respectively, does not correspond to be paid.

• In column "Without patrimonial benefit. Reduction of benefit due to excess contribution for other periods starting from 2016 (DT 33.4 and 6 d) LIS)» the amount of deferred tax assets generated in the tax periods between 2008 and 2015 arising from the application of section 4 of the thirty-third transitional provision of the LIS will be recorded in the box corresponding to the row «Total 2008 to 2015».

  This column will record that part of the deferred tax assets that were originally obliged, by application of the provisions of section 2 of the thirty-third transitional provision of the LIS, to satisfy the patrimonial benefit in order to be converted into a demandable credit against the tax authorities, and that as a consequence of the application of section 4 of said provision, are no longer required to satisfy said benefit.

  Keep in mind:

  With regard to the application of the excess of positive net quota generated in a given period against the deferred tax assets generated in the same period, regulated in the second paragraph of article 130.1 of the LIS, which are applied to assets of the same nature generated in the tax periods from 2008 to 2015 (DT 33.4 of the LIS), it must be recorded in the section "Excess positive net quota (art. 130.1 and DT 33.4 LIS)" on page 20 ter of form 200, in the column called "Excess positive net quota applied in tax periods from 2008 to 2015 (DT 33.4 LIS)" broken down by year of generation.

  The box corresponding to the row "2007 and earlier" must be filled out because, according to the provisions of the thirty-third transitional provision of the LIS, deferred tax assets generated in years prior to January 1, 2008, may be converted into a payable credit without having to satisfy the patrimonial benefit.

• In column "Total amount of pending AID (DT 33.1 and 6 a) LIS)" the total amount of deferred tax assets with the right to conversion into payable credit in accordance with the provisions of article 130 and the thirty-third transitional provision of the LIS will be recorded, which have not been applied in the tax period subject to declaration by integration of provisions in the liquidation, nor have they been converted into payable credit in the period, therefore remaining pending application in future periods. Its amount will result from the aggregation of the three previous columns, which are part of the block "AID pending application in future periods".

  For these purposes, in the boxes corresponding to the rows "2007 and earlier" and "Total 2008 to 2015" the total amount of said assets generated in tax periods beginning before January 1, 2008 and in those between 2008 and 2015, respectively, will be recorded.

2. Deferred tax assets (DTA). Art. 130 LIS

As established in the first paragraph of article 130.1 of the LIS for the tax periods beginning on or after January 1, 2016, the deferred tax assets corresponding to the provisions referred to in article 11.12 of the LIS may be converted into a payable credit against the Tax Authority, for an amount equal to the positive net quota corresponding to the tax period in which they were generated, provided that any of the following circumstances indicated in article 130.2 of the LIS occur:

• That the taxpayer records accounting losses in its annual accounts, audited and approved by the corresponding body.

  In this case, the amount of deferred tax assets subject to conversion will be determined by the result of applying to the total thereof the percentage that represents the accounting losses for the year with respect to the sum of capital and reserves.

• That the entity is subject to liquidation or judicially declared insolvency .

As provided in the second paragraph of article 130.1 of the LIS when amount of the positive net quota of a given period is greater than the amount of deferred tax assets generated in the referred to in the paragraph of article 130.1 of the LIS, the entity may have the right to conversion into a demandable credit against the tax authority provided for in article 130 of the LIS, for an amount equal to the excess, with respect to those assets of the same nature in previous or in the subsequent tax periods.

Also will become a payable credit against the Tax Authority the deferred tax assets for the right to offset negative tax bases in subsequent years , when those are a consequence of integrating into the tax base the provisions for impairment of credits or other assets derived from possible insolvencies of debtors, as well as provisions or contributions to social security systems and, where applicable, early retirement, which generated the deferred tax assets referred to in the first paragraph of this section.

The conversion of the deferred tax assets referred to in this section into a claim against the Tax Authority will occur at the time of filing the Corporate Tax return corresponding to the tax period in which the circumstances indicated above occurred.

This conversion will determine that the taxpayer may choose to request its payment from the Tax Authority or to offset said credits with other tax debts of a state nature that the taxpayer himself generates from the moment of the conversion, in accordance with the procedure and within the period established in article 69 of RIS .

On the other hand, deferred tax assets may be exchanged for Public Debt securities, once the period of eighteen years has elapsed, computed from the last day of the tax period in which the accounting record of such assets occurs.

In relation to taxpayers who apply the provisions of this article 130 of the LIS, article 130.6 of the LIS establishes for them the obligation to provide the following information:

1. Total amount of deferred tax assets corresponding to provisions for impairment of credits or other assets arising from possible insolvencies of debtors not related to the taxpayer, not owed to public law entities and whose deductibility does not occur by application of the provisions of article 13.1.a) of the LIS, as well as those derived from the application of sections 1 and 2 of article 14 of the LIS, corresponding to provisions or contributions to social security systems and, where applicable, early retirement.

2. Total amount and year of generation of the deferred tax assets referred to in letter a) above with respect to which the entity has the right established in this article, specifying those referred to, where applicable, in the second paragraph of article 130.1 of the LIS.

3. Total amount and year of generation of the deferred tax assets referred to in letter a) above with respect to which the entity does not have the right established in this article.

Completion of the “Deferred tax assets (AID)” section of Form 200. Art. 130 LIS» (page 20 ter of model 200)

To comply with the obligation mentioned in the previous paragraphs, taxpayers must complete this section in the manner detailed below:

• In column «Total amount AID (art. 130.6 a) LIS) pending application at the beginning of the period/generated in the same period» the amounts of deferred tax assets generated in 2016, 2017, 2018, 2019, 2020, 2021, 2022 and 2023, respectively, that are pending application, in accordance with the terms of article 130.6 of the LIS, will be recorded in the boxes corresponding to each row of the section «Fiscal year of generation».

• In column "Positive net quota" the amounts of the positive net quotas of the Corporate Tax for 2016, 2017, 2018, 2019, 2020, 2021, 2022 and 2023, respectively, will be entered in the boxes corresponding to each row of the "Generation year" section.

Within this section "Deferred tax assets (AID). Art. 130 LIS», block «AID pending application at the beginning of the period/generated in the same period» , will be completed as follows:

• In column "With the right to conversion into payable credit (art. 130.6 b) LIS)" the amount relating to deferred tax assets with the right to conversion for an amount equal to the positive net quota corresponding to the tax periods 2016, 2017, 2018, 2019, 2020, 2021, 2022 and 2023 of generation thereof, respectively, which are a part of the deferred tax assets of article 130.6 b) of the LIS, will be recorded in the boxes corresponding to each row of the section "Generation year".

• In column "With the right to conversion into payable credit due to excess quota in other periods (art. 130.1 and 6 b) LIS)" the amount relating to the deferred tax assets generated in 2016, 2017, 2018, 2019, 2020, 2021, 2022 and 2023, respectively, which have acquired the right to conversion by application of the excess quota from other periods, as established in the second paragraph of article 130.1 of the LIS, and whose independent completion is established by article 130.6 b) of the LIS, will be recorded in the boxes corresponding to each row of the section "Generation year".

  Keep in mind:

  The application of these excesses of positive net quota corresponding to other periods must be reflected in a correlative manner in the column "Excess of positive net quota applied in tax periods starting from 2016 (art. 130.1 paragraph 2 LIS)" of the section "Excess of positive net quota (art. 130.1 and DT 33.4 LIS)" found at the end of page 20 ter of form 200.

• In column "Without the right to conversion into enforceable credit (art. 130. 6 c) LIS)» the total amount of deferred tax assets generated in 2016, 2017, 2018, 2019, 2020, 2021, 2022 and 2023, respectively, on which the right of conversion into enforceable credit cannot be exercised, as provided for in article 130.6 c) of the LIS, shall be entered in the boxes corresponding to each row of the «Fiscal year of generation» section.

• In column "AID applied in the period (due to the integration of provisions in the settlement)" the amount of deferred tax assets applied for the integration in the settlement of the provisions corresponding to the tax periods 2016, 2017, 2018, 2019, 2020, 2021 and 2022 , respectively, that the entity had pending integration at the beginning of the period subject to declaration, will be recorded in the boxes corresponding to each row of the section "Year of generation".

• In column "AID converted into payable credit in the period" the amount of deferred tax assets generated in 2016, 2017, 2018, 2019, 2020, 2021, 2022 and 2023, respectively, and converted into payable credit in the tax period subject to declaration will be recorded in the boxes corresponding to each row of the "Generation year" section.

Within this section "Deferred tax assets (AID). Art. 130 LIS», the block «AID pending application in future periods», will be completed as follows:

• In column "With the right to conversion into payable credit (art. 130.6 b) LIS)" the amounts of deferred tax assets pending application in future periods that have the right to conversion due to sufficient positive net tax corresponding to the tax period of their generation will be recorded, in accordance with the provisions of the first paragraph of article 130.1 of the LIS.

  These are the deferred tax assets included in the column "With the right to conversion into payable credit (art. 130.6 b) LIS)" of the block "AID pending application at the beginning of the period/generated in the period itself, once the deferred tax assets applied in the period for the integration of provisions in the liquidation and the deferred tax assets converted into payable credit in the period have been deducted.

  For these purposes, in the boxes corresponding to each row of the "Generation year" section, the amount of those deferred tax assets generated in 2016, 2017, 2018, 2019, 2020, 2021, 2022 and 2023, respectively, pending application in future periods, which are entitled to conversion due to a sufficient positive net tax rate in the tax period of generation, will be recorded.

• In column "With the right to conversion into a payable credit for excess quota in other periods (art. 130.1 and 6 b) LIS)" the amounts of deferred tax assets pending application in future periods that have acquired their right to conversion by application of the excess positive net quota of another period will be recorded.

  Its amount comes from the column "With the right to conversion into a payable credit for excess quota from other periods (art. 130.1 and 6 b) LIS)" of the block "AID pending application at the beginning of the period/generated in the same period", once the deferred tax assets applied in the period for the integration of provisions in the settlement and the deferred tax assets converted into a payable credit in the period have been deducted.

  For these purposes, the amount of deferred tax assets generated in 2016, 2017, 2018, 2019, 2020, 2021, 2022 and 2023, respectively, pending application in future periods, which have acquired the right to conversion by application of the excess positive net tax corresponding to other tax periods, will be recorded in the boxes corresponding to each row of the "Generation year" section.

• In column "Without the right to conversion into payable credit (art. 130.6 c) LIS)" , the total amount of deferred tax assets generated in 2016, 2017, 2018, 2019, 2020, 2021, 2022 and 2023, respectively, and pending application in future periods, on which the right to conversion into payable credit cannot be exercised, as provided for in article 130.6 c) of the LIS, shall be recorded in the boxes corresponding to each row of the "Fiscal year of generation" section.

3. Conversion of deferred tax assets into a claim against the tax authorities

According to the provisions of article 130.3 of the LIS , the conversion of deferred tax assets referred to in article 130.1 of the LIS will occur at the time of filing the Corporate Tax return corresponding to the tax period in which the following circumstances described in article 130.2 of the LIS have occurred:

• That the taxpayer records accounting losses in its annual accounts, audited and approved by the corresponding body.

  In this case, the amount of deferred tax assets subject to conversion will be determined by the result of applying to the total thereof the percentage that represents the accounting losses for the year with respect to the sum of capital and reserves.

• That the entity is subject to liquidation or judicially declared insolvency .

Also will become a claim against the Tax Authority the deferred tax assets for the right to offset negative tax bases in subsequent years, when those are a consequence of integrating into the tax base the provisions for impairment of credits or other assets derived from possible insolvencies of debtors, as well as the provisions or contributions to social security systems and, where appropriate, early retirement, which generated the deferred tax assets referred to in the first paragraph of article 130.1 of the LIS.

The conversion of deferred tax assets into a claimable credit against the Tax Authority referred to in article 130.1 of the LIS will determine that the taxpayer may choose to request its payment from the Tax Authority or to offset said credits with other tax debts of a state nature that the taxpayer himself generates from the moment of the conversion, in accordance with the procedure and within the period established in article 69 of the RIS.

On the other hand, deferred tax assets may be exchanged for Public Debt securities, once the period of eighteen years has elapsed, computed from the last day of the tax period in which the accounting record of such assets occurs.

Completion of the section "Conversion of deferred tax assets into a claim against the Tax Authority" in Form 200 (page 20 ter of Form 200)

To comply with the requirements explained in the previous paragraphs, taxpayers must complete this section as detailed below:

• In box [00393] the amount corresponding to the conversion into a payable credit against the Tax Authority of said deferred tax assets will be recorded in accordance with the terms provided in sections 1 and 2 of article 130 of the LIS .

  The amount in this box must be the sum of boxes [01537] and [01567].

• In box [00150] the amount on which the taxpayer has chosen to request the payment of deferred tax assets converted into a payable credit against the Tax Authority will be recorded.

• In box [00506] the amount on which the taxpayer has chosen to request the offset of deferred tax assets converted into a payable credit against the tax authority will be recorded.

4. Excess positive net quota (art. 130.1 and DT 33.4 LIS)

As already mentioned in previous sections, article 130.1 of the LIS establishes that deferred tax assets corresponding to the provisions referred to in article 11.12 of the LIS may be converted into a claimable credit against the tax authorities, for an amount equal to the positive net amount corresponding to the tax period in which they were generated, provided that any of the circumstances set out in article 130.2 of this Law occur.

The second paragraph of article 130.1 of the LIS establishes that when the amount of the positive net quota of a certain tax period is greater than the amount of deferred tax assets generated in the same period referred to in the previous paragraph, the entity may have the right provided for in this article, for an amount equal to the excess, with respect to those assets of the same nature generated in previous tax periods or in the 2 subsequent tax periods.

Section 4 of the thirty-third transitional provision of the LIS establishes that notwithstanding the provisions of the second paragraph of section 1 of article 130 of the LIS, the excess indicated therein will reduce, as a prior measure, the amount of the deferred tax assets in respect of which the patrimonial benefit indicated in section 2 of this provision must be satisfied.

Section 2 of the thirty-third transitional provision of the LIS establishes that in the event that the difference between the amount of deferred tax assets referred to in section 1 of said provision and the aggregate sum of the positive net quotas of this Tax, corresponding to the tax periods between 2008 and 2015 is positive, the application of the provisions of article 130 of the LIS will require that the entity satisfy, with respect to said difference, the patrimonial benefit for conversion of deferred tax assets into a payable credit against the tax authority, in the terms established in the Thirteenth Additional Provision of the LIS.

Completion of the section "Excess positive net quota (art. 130.1 and DT 33.4 LIS)" in form 200 (page 20 ter of form 200)

To comply with the requirements explained in the previous paragraphs, taxpayers must complete this section as detailed below:

• In column "Excess positive net quota pending at the beginning of the period/generated in the same period" the amount of the positive net quota that in the tax periods corresponding to 2021, 2022 and 2023, respectively, was higher than the amount of deferred tax assets generated in the same and that is pending application at the beginning of the tax period subject to declaration will be recorded in the boxes corresponding to each row of the "Generation year" section.

• In column « Excess positive net quota applied in tax periods from 2008 to 2015 (DT 33.4 LIS) » , as established in section 4 of the thirty-third transitional provision of the LIS, in the boxes corresponding to each row of the section «Generation year», the amount of the excess positive net quota generated in 2021, 2022 and 2023, respectively, and collected in the period subject to declaration in the boxes of the section «Excess positive net quota pending at the beginning of the period/generated in the same period», which reduces the amount of deferred tax assets corresponding to the tax periods between 2008 and 2015, for which the patrimonial benefit must be paid, will be recorded.

• In column "Excess positive net quota applied in tax periods beginning in 2016 (art. 130.1 paragraph 2 LIS)" the amount of the excess positive net quota generated in 2021, 2022 and 2023, respectively, to be applied to deferred tax assets generated in tax periods beginning on or after January 1, 2016, under the terms set forth in the second paragraph of article 130.1 of the LIS, will be entered in the boxes corresponding to each row of the "Generation year" section.

• In column "Excess positive net quota pending application in future periods" the amount of the excess positive net quota corresponding to 2022 and 2023 recorded in the boxes of the section "Excess positive net quota pending at the beginning of the period/generated in the same period" in the settlement of the tax period subject to declaration, but not applied in said period and therefore pending application for future periods, will be recorded in the boxes corresponding to each row of the "Generation year" section.