News published in INFORMA 2017

New features introduced in the INFORMA programme in JANUARY

The equalization reserve must be provided against the positive results of the year in which the reduction in tax base is made. If this reserve cannot be set up, the reduction shall be dependent upon the reserve being made against the first profits earned in subsequent years. The General Meeting shall decide on the distribution of results for the year based on the approved balance sheet. Thus, the tax levelling reserve shall be set up when the distribution of profit is determined in accordance with prevailing legislation.

The term of ownership, without interruption, of the shareholding for the exemption set forth in article 21 of Act 27/2014 to be applicable shall be the year prior to the day on which the profit distribution can be called or, if none, it shall be held thereafter for the amount of time necessary to meet that term.

The expenses incurred by a company on account of compensation paid to workers shall be tax deductible provided they meet the requirements in terms of accounting registration, accrual and documentary proof, and to the extent that they are not deemed to be a non-deductible expense in accordance with article 15 of the Spanish Corporation Tax Act.

The management of joint expenses by a civil partnership of professionals is not excluded from the commercial sphere and, with effect for the tax periods commencing from 1 January 2016, shall be deemed tax payable for Corporation Tax purposes.

A company established in accordance with Act 35/2011, governing joint ownership of farming operations without a legal status, shall continue to be taxed from 1 January 2016 in accordance with the special income allocation regime established in section two of title X of the Personal Income Tax Act, regardless of the method used to determine the earnings of the activity, and will not be subject to Corporation Tax.

In the event of receiving an indemnity as a result of a non-final ruling, two situations shall be distinguished. If a deposit is made into a restricted account held by the judicial body issuing the ruling, this will not give rise to any asset recognition and, therefore, shall not generate any revenue to be included in the gross tax base. In this case, no provision shall need to be made. On the other hand, if the company is paid the amount agreed in the judicial ruling, and the asset is recognised and corresponding revenue booked, it must be included in the gross tax base for Corporation Tax calculation purposes. In this case, provisions made as a result of litigation in progress shall be considered tax deductible for Corporation Tax purposes in the period in which the provisions are made. 

Professional fees paid abroad, agreed on under contract, for each of the jobs or supplies contracted and duly invoiced, shall be deductible if the requirements are met in terms of accounting registration, accrual, documentary proof, and they must be invoiced as services rendered by the corresponding companies or professionals.

If the investments or expenses are not realised during the term set, the portion of the total amount corresponding to the profit amount deemed not applied, together with the corresponding arrears interest, shall be paid together with the tax payable for the tax period corresponding to the fourth year after the gross tax base was reduced.

Income from granting the use of technology cannot avail of the reduction established in article 23 of the Spanish Corporation Tax Act insofar that this income does not come from the granting, on an autonomous basis, of the information constituting the ideas and basic principles of the software granted, but rather of a software that uses artificial intelligence to determine the application of a series of scientific procedures that guide the users when determining the action mechanisms of new products on a theoretical basis.

Income from visa activity carried out by Professional Associations is not exempt from Corporation Tax since this constitutes an economic activity.

The increase in shareholders' equity calculated in accordance with article 25 of the Spanish Corporation Tax Act, multiplied by the proportion existing between the tax paid on home rentals and the total tax paid, shall not be eligible to the capitalisation reserve reduction.

The reduction established in article 23 of the Spanish Corporation Tax Act shall only be allowed in the case of the cession and transfer of the intangible asset stated therein, which include industrial design. Notwithstanding, under no circumstances may the reduction be applied to income from trademark transfers.

If the amount of the reduction in the gross tax base is reclassified from the voluntary reserves account to the capitalisation reserve account within the legally established term, the provisioning requirement set forth in article 25.1 of the Spanish Corporation Tax Act shall be deemed fulfilled, provided that at the end of the year, the company has had an increase in equity capital with respect to the amount recorded on this account on the first day of the year in the terms defined in article 25 of the Spanish Corporation Tax Act.

The use of the PAYPAL system as a method of payment for services received complies with the proof requirement provided the legally-established conditions are met in terms of accounting registration, accrual, correlation of income and expenses and documentary proof, and provided that it is not deemed a non-deductible expense for tax purposes based on the application of any specific precept established in the Spanish Corporation Tax Act.

Commissions received by an entity on services rendered to buyers and sellers shall form part of the gross tax base of Corporation Tax, without the price of the sale collected by the entity and delivered to the seller on behalf of a third party being considered compensation or revenue.