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Regulatory developments 2019

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New aspects of payments by instalments Companies 2P 2019

The main new aspects included in the instalment payment of October 2019 (2P) on account of Corporation Tax and Non-Resident Income Tax with Permanent Establishment are the following:

  1. ZEC zone branches in fiscal consolidation

    In accordance with the provisions of Additional Provision Fourteen bis of Law 19/1994, of 6 July, amending the Canary Islands Economic and Tax System, introduced by Law 8/2018, of 5 November, taxpayers who have branches of the Canary Islands Special Zone of entities with tax residence in Spain that form part of a tax group applying the tax consolidation system must declare separately the part of the tax base attributable to the branch of the Canary Islands Special Zone.

    This obligation must also include the obligation to make payments in instalments in accordance with Article 40(3) of Law 27/2014 of 27 November on Corporation Tax (hereinafter LIS).

    Therefore, from the period 2P 2019 each of these entities must present the payment on account of this tax in its corresponding form 202.In this settlement, the amounts of the previous instalments corresponding to the computable period that, if applicable, could have been included in the tax consolidation system form 222, period 1P may be deducted.

    This is without prejudice to Form 222, which must be presented by the dominant entity for the part of the taxable base that is not taxed at the special rate and in respect of which it is going to apply a special tax consolidation system.

  2. Shipowners under special tonnage arrangements

    In accordance with the amendment to the additional provision four of the LIS, introduced by Article 4 of Law 8/2018 of 5 November amending Law 19/1994 of 6 July amending the Canary Islands Economic and Fiscal System, entities taxed under the special tonnage system are excluded from the minimum instalment payment.

    The instalment payments of these entities will be made in the following way:

    • Entities whose tax base is determined in its entirety according to the objective estimation method.

      In the “additional data (3)” section of form 202, mark the key “entity applying the tonnage system for shipping entities” and enter 25% in the key “current corporation tax rate”.

      For these taxpayers, in the case of companies with a turnover of 10 million euros or more, the minimum amount of the instalment payment will not apply, so the form to be filled in in Form 202 will not calculate box 33 (minimum to be paid).

    • Entities whose tax base is determined partly according to the objective estimation method and partly by applying the general tax system (activities not included in the special system)

      In the “additional data (3)” section of form 202, enter the key “entity applying the tonnage system for shipping entities”, the key “other entities with the possibility of applying two tax rates” and enter 25/25N in the key “current corporation tax rate”.

      In those cases in which the instalment payment is presented through direct filing (without using the form) due to space restrictions in the definition of the field "Additionaldata - Corporation Tax rate of the current fiscal year", the value "25/25" must be entered instead of the value "25/25N".

      Completion of section "B.2 Specific cases (entities with more than one percentage):

      • Box 20 (type 1 base) shall include the basis for the instalment payment corresponding to the activities of the entity that pay taxes under the general system.The form in Form 202 shall calculate in key 21 the percentage applicable for the purposes of the instalment payment in relation to the activities included in the general system and in key 22 the resulting amount.
      • Box 23 (type 2 base) will include the basis for the instalment payment corresponding to the activities of the entity taxed under the special system.The form in Form 202 shall state 25% in key 24 and the resulting amount in key 25.

      In the case of companies with a turnover of EUR 10 million or more, the filer must include in box 33 (minimum amount to be paid) the corresponding amount, if any, for the activities included in the general system, since these activities are not excluded from the minimum instalment payment.This data must be entered directly by the filer.

      In accordance with additional provision fourteen of Law 27/2014, of 27 November, on Corporation Tax, in the wording given by Royal Decree Law 2/2016, of 30 September, introducing tax measures aimed at reducing the public deficit, the amount to be paid may in no case be less than 23% (25% for taxpayers to whom the tax rate provided for in the first paragraph of section 6 of article 29 of this Law applies) of the positive result of the profit and loss account for the year of the 3, 9 or 11 months of each calendar year or, for taxpayers whose tax period does not coincide with the calendar year, of the year elapsed from the beginning of the tax period until the day prior to the beginning of each instalment payment entry period, determined in accordance with the Commercial Code and other development accounting regulations, less only the instalments made previously, corresponding to the same tax period.