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Practical Manual for Companies 2024.

Measures to adapt some of the provisions of Royal Decree-Law 3/2016 declared unconstitutional

The Constitutional Court in its Judgment 11/2024, of January 18, declared the unconstitutionality and nullity of the measures contained in the fifteenth Additional Provision and section 3 of the sixteenth transitional provision of the LIS, as amended by Royal Decree-Law 3/2016, of December 2.

Law 7/2024, of December 20, with effect for tax periods beginning on or after January 1, 2024, and not ending by December 22, 2024, reintroduces these measures as follows:

A. Limits applicable to large companies

The fifteenth Additional Provision is added to the LIS, which reestablishes the following special provisions in the limits to be applied by taxpayers whose net turnover is at least 20 million euros during the 12 months prior to the date on which the tax period begins:

  • HE replace the limits established in section 12 of article 11, in the first paragraph of section 1 of article 26, in letter e) of section 1 of article 62 and in letters d) and e) of article 67 of the LIS, by the following:

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

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

  • A is established joint limit 50 percent of the full amount to be applied to deductions for international and domestic double taxation and those applicable to the international tax transparency regime, generated in the tax period and pending compensation.

B. Reversal of impairment losses on securities representing participation in the capital or equity of tax-deductible entities

Section 3 is added to the sixteenth transitional provision of the LIS, which reestablishes this regime according to which the amount of impairment losses on securities representing participation in the capital or equity of entities that were deductible from the tax base for the Tax in tax periods beginning before January 1, 2013, must be included, at least, in equal parts in the tax base corresponding to each of the first three tax periods beginning on or after January 1, 2024.

In the case of transmission of these values during the aforementioned tax periods, the amounts pending reversal will be integrated into the tax period in which the transfer occurs, with the limit of the positive income derived from that transfer.

If in any of these tax periods the reversal of a higher amount By applying the provisions of sections 1 and 2 of the sixteenth transitional provision of the LIS, the remaining balance will be integrated, at least, in equal parts between the remaining tax periods.

It is permitted to offset the amount derived from the income integrated into the tax base in accordance with the provisions of the preceding paragraphs, with the negative tax bases generated in tax periods beginning before January 1, 2021, without having to apply the special limits established in section 1 of the fifteenth Additional Provision of the LIS.