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Tax periods starting on or after January 1, 2019

The approval of Law 27/2014, of November 27, on Corporate Tax and the Regulations that develop it, approved by Royal Decree 634/2015, of July 10, meant a complete revision of the Corporate Tax figure. Listed below are the new features that specifically affect the settlement of Corporate Tax in 2019 as a result of the regulatory changes in force in said year :

  • Exceptionally, as established in Royal Decree Law 19/2020, of May 5, for the year 2019, the deadline for the formulation and approval of the annual accounts , and other legally required documents, for the 2019 Corporate Income Tax return, is three months from June 1, 2020. In addition, the deadline for approving the annual accounts from the formulation is reduced from three to two months and said deadline is harmonized for all companies, whether listed or not, so that all must have their accounts approved within the first ten months of the financial year.

    Taxpayers who comply, for the formulation and approval of the annual accounts for the 2019 financial year, with the provisions of articles 40 and 41 of RD-law 8/2020, of March 17, will submit the tax return for the tax period corresponding to said financial year within the period provided for in section 1 of article 124 of the LIS (as regulated by article 12 RD-law 19/2020). If at the end of the period provided for in the previous paragraph the annual accounts have not been approved, the declaration will be made with the annual accounts available , understood as:

    • For the listed public limited companies , the audited annual accounts referred to in letter a) of article 41.1 of the aforementioned RD-law 8/2020.
    • For the remaining taxpayers , the audited annual accounts or, failing that, the annual accounts prepared by the corresponding body, or in the absence of the latter, the available accounting kept in accordance with the provisions of the Commercial Code or with the provisions established in the regulations by which they are governed.

    If the self-assessment of the Tax in accordance with the approved annual accounts differs from that submitted within the ordinary declaration period, they will submit a new self-assessment with a deadline until November 30, 2020, which may be:

    • New supplementary statement: If it results in a higher amount to be paid or a lower amount to be returned than that derived from the self-assessment made. This declaration will accrue late payment interest (from the day after the end of the period provided for in article 124.1 of the LIS) but not the surcharge for late declaration without prior request.
    • New statement in the rest of the cases: In cases where the new declaration is not considered complementary, it will take effect from its presentation, without the provisions of article 120.3 of the LGT, and of articles 126 and following of the General Regulation approved by Royal Decree 1065/2007, of July 27, being applicable, nor will the powers of the Administration be limited to verify or check the first and the new self-assessment.

    The limitations on the rectification of options referred to in article 119.3 of the LGT will not apply to the new self-assessment.

  • For tax periods beginning on or after November 10, 2018, a new letter m) is added to article 15 of Law 27/2014, of November 27, on Corporate Income Tax, by the First Final Provision of Royal Decree-Law 17/2018, of November 8. A new assumption of non-deductible tax expense is regulated establishing that the tax debt of the Tax on Property Transfers and Documented Legal Acts, Documented Legal Acts modality, notarial documents, will not be considered a tax-deductible expense when it involves loan deeds with mortgage guarantee in which the taxpayer is a lender.

  • With effect for tax periods beginning on or after 7 November 2018 the fourth Additional Provision, deduction for investments in the Canary Islands of Law 19/1994, of 6 July is amended, raising the joint limit on the quota in the islands of La Palma, La Gomera and El Hierro so that the minimum cap of 80% will increase to 100% and the minimum differential of 35 points will increase to 45 percentage points when the Community regulations on state aid so permit and the investments are contemplated in Law 2/2016, of 27 September and other laws on measures to regulate the economic activity of these islands.

  • With effect for tax periods beginning on or after November 7, 2018 Additional Provision Fourteen, limits on deductions for investments in film productions, audiovisual series and live performing arts and music shows carried out in the Canary Islands , of Law 19/1994, of July 6, is amended, incorporating the following new features:

    • An increase in the amount of deductions for investments in Spanish feature films, audiovisual fiction series', animations, or documentaries, as referred to in Section 1 of Article 36 of Act 27/2014 of 27 November, on Corporation Tax, which will increase from 4.5 to 5.4 million euros when relating to productions made in the Canary Islands.

    • There will also be an increase from 4.5 to 5.4 million euros for the amount of deductions for expenses incurred in the Canary Islands for foreign feature film productions, or audiovisual works as referred to in section 2 of the article 36 of the Act 27/2014.

    • The minimum sum of expenditure indicated in Section 2 of Article 36 of Act 27/2014, in cases of carrying out post-production or animation services for a foreign production, will be fixed at 200,000 euros for expenditure incurred in the Canary Islands.

    • Finally, the minimum sum of deductions for expenditure incurred in production and live performing arts and musical events as referred to in Section 3 of Article 36 of Act 27/2014 is fixed at 900,000 euros for expenditure incurred in the Canary Islands.

  • In addition, as a supplement to the regime of deductions for incentives and stimuli for business investment in the Act on Corporation Tax applicable in the Canary Islands, for tax periods beginning on or after 7 November 2018 a new Article 94 bis, in Act 20/1991, of 7 June, through which those companies contracting staff to work in the Canary Islands will have the right to the fiscal benefits due to creating employment, as established by fiscal regulations in accordance with the requirements established in them, is added, increasing them by 30 per cent. This amendment includes the application of deductions for job creation in Article 37 of Act 27/2014 and the increase that did not previously exist of 30 per cent on sums deductible both on deductions named in Article 37 and 38 on deductions for the creation of employment for workers with disabilities of the aforementioned Act 27/2014.

  • With effect for tax periods beginning on or after 1 January 2018 a new Additional Provision fourteenth bis Corporate Tax is added. Application of the fiscal consolidation regime to companies with branches in the Canary Islands Special Zone in Act 19/1994 of 6 July, establishing that the application of the special tax rate stated in Article 43 of this Act in the case of in branches in the Canary Islands Special Zone of companies with fiscal residence in Spain will not impede these companies from forming a fiscal group employing the fiscal consolidation regime stipulated in Chapter VI of Title VII Act 27/2014 of 27 November, on Corporation Tax. Notwithstanding the above, the part of the gross tax rate of the company forming part of a fiscal group, that is attributable to the Special Canary Islands Zone branch, will not be included in the company's individual gross tax base for the purpose of determining the fiscal group's gross tax base, and will be determined separately in legally-determined terms.

  • With effect for tax periods beginning on or after 7 November 2018 Section 1 of the Fourteenth Additional Provision of Law 27/2014 on Corporate Income Tax is amended, establishing that in the case of Shipping Companies to which the bonus established in article 76, sections 1 and 2, of Law 19/1994, of 6 July, amending the Economic and Tax Regime of the Canary Islands, applies, the positive result will be taken exclusively from non-bonus income. And that in the case of shipping companies that pay taxes under the Special Regime based on tonnage established in Chapter XVI of Act 27/2014 of 27 November, on Corporation Tax, instalment payments will be calculated on the amount of gross tax base obtained under that established by Article 114.1 of this Act (containing the special rule on setting the gross tax base according to each ship's net registered tonnage).

    In both cases this compensates for the adverse impact of determining instalment payments introduced by the minimum instalment payment rule without considering that these companies can apply, respectively, both a subsidy of 90 per cent of the income deriving from operations of ships registered in the Special Registry, or determining their gross tax base according to the regulations cited in the Special Regime based on Tonnage.