How are payments in instalments calculated according to the regime regulated in Article 40.3 of the Corporation Tax Act (LIS)?
We explain you how payments in instalments are calculated in accordance with Article 40.3 of the Spanish Corporation Tax Acr (LIS)
In this modality, payments by instalment will be made over the gross tax base of the period for the 3, 9 or 11 months of each calendar year, determined according to the standards in the tax act.
If the tax period does not coincide with the calendar year, the instalment payment will be made on the part of the gross tax base for the days that have elapsed from the beginning of the tax period until the day before 1 April, 1 October and 1 December.
Taking effect from the tax periods starting from 1-1-2018, the percentages established for determining the amount of the instalment payments as per article 40.3 of the Spanish Corporation Tax Act are:
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In general terms, the amount resulting from multiplying by five-sevenths the tax rate rounded.
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For taxpayers whose net turnover in the 12 months prior to the start date of the tax period is at least 10 million euros, the result of multiplying by nineteen twentieths the tax rate rounded.
Example:
In the case of a company that pays tax at the general rate of 25% and whose turnover in the 12 months prior was under 10 million euros, the percentage applicable in the calculation of the instalment payment in accordance with the modality set forth in article 40.3 of the Spanish Corporation Tax Act, will be the result of multiplying by five sevenths the tax rate rounded off, i.e. 17%.
In the case of a company that pays tax at the general rate of 25% and whose turnover in the 12 months prior was under 10 million euros, the percentage applicable in the calculation of the instalment payment in accordance with the modality set forth in article 40.3 of the Spanish Corporation Tax Act, will be the result of multiplying by nineteen twentieths the tax rate rounded up or down, i.e. 24%.
In 2015, the percentages provided for in DT 34 of the LIS will apply.
The discounts applicable to the taxpayer will be deducted from the resulting amount, along with the withholdings or income on account payed on the taxpayer's income, and payment instalments made that correspond with the tax period.
For the fractional payments established in article 40.3 of the LIS there is a minimum amount, but only for those taxpayers whose net turnover in the 12 months prior to the date on which the tax period begins is at least 10 euros. The amount payable on instalments made in accordance with article 40.3 of the Spanish Corporation Tax Act, must not be lower, under any circumstances, than 23% of the positive result of the statement of profit and loss of the first 3, 9 or 11 months of each calendar year, or, for taxpayers whose tax period does not coincide with the calendar year, of the fiscal year starting from the beginning of the tax period until the day before the start of each staged payment deposit period, determined in accordance with the Code of Commerce and other accounting regulations, deducted exclusively in instalment payments made previously, corresponding to the same tax period.
This percentage will be 25% in the case of taxpayers to whom the tax rate stated in paragraph one of article 29.6 of the Spanish Corporation Tax Act is applicable.
Excluded from this positive result is the amount corresponding to income from debt relief and grace period operations as a result of agreements by taxpayers with creditors. This result includes the part of the amount included in the taxable base of the tax period. Also excluded, for these purposes, is the amount of the positive result of capital increase operations or equity capital used to offset loans not included in the gross tax base by virtue of article 17.2 of the Spanish Corporation Tax Act.
In the case of partially exempt entities to which the special tax regime established in Chapter XIV of title VII of the Spanish Corporation Tax Act is applicable, the amount corresponding exclusively to non-exempt income will be taken as a positive result.
In the case of entities to whom the discount set forth in article 34 of the Spanish Corporation Tax Act is applicable, the amount corresponding exclusively to non-discounted income will be taken as a positive result.
The above will not apply to the entities referred to in sections 3, 4 and 5 of art. 29 LIS or to those referred to in Law 11/2009 regulating SOCIMI .