Methods of payment by instalments

1. Modality regulated in article 40.2 of the LIS

In this modality it will be taken ascalculation baseThe full amount of the last tax period whose declaration deadline was due on the 1st of April, October and December, reduced by any deductions and allowances, as well as any withholdings and payments on account corresponding to that period, provided that said tax period was of annual duration.

The percentage of the calculation base will be applied to said calculation base.18 percent,obtaining as a result the amount of the corresponding fractional payment.

2. Modality regulated in article 40.3 of the LIS

In this modality, the amount of the payment to be entered will be the result of applying the percentage that results from multiplying by five-sevenths The tax rate, rounded down, on the part of the taxable base for the period of the first three, nine or eleven months of each calendar year, determined according to the rules of the LIS. From the resulting quota will be deducted the bonuses of Chapter III of Title VI of the LIS, other bonuses that are applicable to the taxpayer, the withholdings and payments on account made on the taxpayer's income, and the fractional payments made corresponding to the tax period.

According to thetaxpayers whose net turnover in the 12 months prior to the date on which the tax period begins is at least 10 million euros, the percentage referred to in the last paragraph of article 40.3 of the LIS will be the result of multiplying by nineteen twentieths the tax rate rounded up.

Taxpayers whose tax period does not coincide with calendar year will make the fractional payment on the part of the taxable base corresponding to the days elapsed from the beginning of the tax period until the day before April 1, October 1 or December 1, depending on the corresponding period. In these cases, the instalment payment is on account of the payment for the tax period in progress on the day before the beginning of each of the above-mentioned payment periods.

In the case of the Spanish economic interest groups and temporary business associations covered by the special regime regulated in Chapter II of Title VII of the LIS that apply this modality of article 40.3 of the LIS, the calculation base will not include the part of the taxable base attributable to partners resident in Spanish territory or non-residents in Spanish territory with a permanent establishment therein. Therefore, these entities are not obliged to make fractional payments when the percentage of participation corresponding to partners or members resident in Spanish territory is 100 percent.

In the case of taxpayers who are subject to both state and regional regulations and jointly pay taxes to the State and the Provincial Councils of the Basque Country and/or the Foral Community of Navarre, the basis for the split payment will be the proportional part that corresponds to each of these Administrations, taking into account the volume of operations carried out in each territory determined according to the volume of operations carried out in each territory according to the last tax return-settlement.

For the purposes of the provisions of article 40.3 of the LIS, in accordance with the Fifth Additional Provision of the LIS , when calculating the base for the split payment it must be taken into account that the amount of the Reserve for Investments in the Canary Islands (regulated by article 27 of Law 19/1994) that is expected to be made may be reduced from the tax base, prorated in each of the periods of the first three, nine or eleven months of the tax period and with a maximum limit of 90 percent of the tax base for each of them. If the amount of the reserve actually provided is less than 20 percent of the amount of the reduction in the tax base made to calculate the amount of each of the fractional payments raised to the year, the entity will be obliged to regularize said payments for the difference between the initial provision and the effective provision, without prejudice to the settlement of the interest and surcharges that may be applicable.

• Minimum installment payment

Regulation: DA 14 LIS

For taxpayers whose turnover in the 12 months prior to the start of the tax period is at least 10 million euros , a minimum split payment is set , such that the amount to be paid may not be less, in any case, than 23 percent (this percentage will be 25 percent , in the case of taxpayers to whom the tax rate provided for in the first paragraph of article 29.6 LIS applies) of the positive result of the profit and loss account for the financial year of the first 3, 9 or 11 months of each calendar year.

However, there are certain concepts that will be excluded from the positive result referred to:

• The amount of the positive result that corresponds to income derived from debt reduction or waiting operations resulting from an agreement with the taxpayer's creditors, including in said result that part of its amount that is integrated into the taxable base of the tax period.

• The amount of the positive result resulting from capital or equity increase operations by offsetting credits that is not included in the tax base by application of article 17.2 of the LIS.

• If it is a partially exempt entities to which the special tax regime established in Chapter XIV of Title VII of the LIS applies, the positive result will be taken as the one corresponding exclusively to non-exempt income.

• If the entities are subject to the bonus for the provision of local public services established in article 34 of the LIS, the positive result will be taken exclusively as the one corresponding to non-subsidized income.

• If the entities apply the Reserve for investments in the Canary Islands, the amount of the reserve for investments in the Canary Islands that is expected to be made in accordance with the provisions of section 1 of the fifth Additional Provision of the LIS.

• If it is about entities with the right to bonus corresponding to the Income derived from the sale of tangible goods produced in the Canary Islands provided for in article 26 of Law 19/1994, 50 percent of the returns that are entitled to said bonus.

• In the case of entities that apply the tax regime of the Canary Islands Special Zone , regulated in Title V of Law 19/1994, for the purposes of the minimum split payment, the part of the positive result that corresponds to the percentage indicated in article 44.4 of Law 19/1994 will not be computed, unless the provisions of letter b) of section 6 of said article are to be applied, in which case the positive result to be computed will be reduced by the amount resulting from applying the provisions of that letter.

• In the case of shipping entities to which the bonus established in sections 1 and 2 of article 76 of Law 19/1994, of July 6, applies, the positive result will be taken exclusively as corresponding to non-bonus income.

• If it concerns entities that apply the bonus provided for in article 33 LIS, which regulates the bonus for income obtained in Ceuta and Melilla , 50 percent of that part of the positive result that corresponds to income that is entitled to it.

The minimum installment payment will not apply:

• To the entities referred to in sections 3, 4 and 5 of article 29 of the LIS nor those referred to in Law 11/2009 .

• To the venture capital entities regulated by Law 22/2014, of November 12.

• To the shipping entities that apply the special regime based on the tonnage regulated in Chapter XVI of Title VII of the LIS.

3. Choice of method

The taxpayer may choose one or another method of split payment.

However, only obliged to the modality regulated in article 40.3 of the LIStaxpayers:

• Whose net turnover amount has exceeded the amount of 6 million euros during the 12 months prior to the start date of the tax period to which the partial payment corresponds.

• That they are subject to the Special Regime for Shipping Entities Based on Tonnage established in Chapter XVI of Title VII of the LIS. These taxpayers must take into account that the application of the modality of article 40.3 of the LIS, will be carried out on the taxable base calculated in accordance with the rules established in article 114 of the LIS, and applying the percentage referred to in article 115 of the LIS, without computing any deduction on the part of the quota derived from the part of the taxable base determined according to the provisions of article 114.1 of the LIS.

Taxpayers must exercise the option of modality in the corresponding census declaration, taking into account that:

• If the tax period to which the aforementioned option refers coincides with the calendar year, the option will be exercised during the month of February.

• Yeah does not coincide with the calendar year, the option must be exercised in the corresponding census declaration, within a period of two months from the beginning of said tax period, or within the period between the beginning of said tax period and the end of the period for making the first partial payment corresponding to the aforementioned tax period, when this last period is less than two months.

The exercise of the option will link the taxpayer with respect to payments corresponding to the same tax period and subsequent periods, as long as it is not waived through the corresponding census declaration, which must be exercised within the same deadlines established in the previous paragraph.