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Practical Manual for Companies 2023.

Levelling reserve converted into tax payable

Article 29.2 of the LIS regulates the tax rates applicable to cooperatives, establishing that fiscally protected cooperative societies will pay 20 percent tax on cooperative results and 25 percent tax on non-cooperative results; and credit cooperatives and rural banks for the general cooperative results of 25 percent and for the non-cooperative results of 30 percent.

According to the provisions of this article 29.2 of the LIS, a fiscally protected cooperative pays corporate tax at a tax rate different from the general one, so cannot apply the leveling reserve (nor for non-cooperative results).

Consequently, only cooperative societies that do not have the status of tax-protected can choose to apply the tax benefit of the equalization reserve.

Filling in form 200

[01285 and [01286] Equalization reserve converted into quotas (only entities under art. 101 LIS)" on page 14 of form 200 shall be completed when the reporting entity is a cooperative society that does not have tax-protected status and chooses apply the tax incentive for the equalization reserve established in article 105 of the LIS, provided that they meet the conditions set out in article 101 of the LIS and apply the tax rate for in the first paragraph of article 29.1 of this Law.

Cooperatives that do not have fiscally protected status and choose to apply the equalization reserve , must have previously marked the box [00019] "Other cooperatives" and the box [00006] "Incentives for small entities (Cap. XI, Title. VII LIS)» on page 1 of form 200.

In the tax periods in which these cooperative societies choose to apply the leveling reserve, they must make the following adjustments in boxes [01285] and [01286] "Leveling reserve converted into quotas (only entities of art. 101 LIS)" on page 14 of form 200:

  • In box [01286] of decreases, a negative adjustment will be recorded in the previous positive integral quota, taking into account the limits mentioned in article 105 of the LIS.

  • Likewise, cooperative societies that have chosen to apply said tax benefit will be obliged to reverse said adjustment in box [01285] of increases in the tax periods that conclude in the five years immediately following the end of said period, as it generates negative prior integral quota and up to the amount thereof.