Non deductible expenses

Those representing remuneration of equity.

Those derived from accounting Corporation Tax. Income from such accounting will not be considered income.

Fines and penal and administrative sanctions, surcharges of the executive period and the surcharge for untimely declaration without prior requirement.

Gambling losses.

Donations and gifts.

Expenses of activities contrary to the legal system.

Expenses of services corresponding to operations carried out, directly or indirectly, with persons or entities resident in countries or territories classified as tax havens, or which are paid via persons or entities resident in them, except if the taxpayer proves that the accrued expense corresponds to an operation or transaction actually carried out.

Financial expenses accrued in the tax period, deriving from debts with group companies according to the criteria laid down in Article 42 of the Commercial Code, regardless of the residence and the obligation of formulating consolidated annual accounts, allocated to the acquisition from other group companies of holdings in the capital or corporate equity of any type of companies, or to the execution of contributions in the capital or corporate equity of other companies of the group, unless the taxpayer proves that there are valid economic reasons for the performance of these operations.

Expenses deriving from the extinction of the employment relationship, common or special, or from the mercantile relationship referred to in Article 17.2.e) of Act 35/2006, or from both, even when they are paid in several tax periods, which exceed, for each recipient, the greater of the following amounts:

1. 1 million euros.
2. The obligatory amount established in the Workers' Statute, in its implementing regulations or, where relevant, in the regulation that governs the execution of rulings, without it being able to be considered as such if established by virtue of an agreement, covenant or contract. However, in cases of collective lay-offs carried out in accordance with the terms of Article 51 of the Workers' Statute, or arising out of the causes provided for in paragraph c) of Article 52 of the Statute, provided that, in both cases, they are due to economic, technical, organisational or production reasons or due to force majeure, it will be the amount established with an obligatory nature in the Statute for unlawful dismissal.

(Revoked)

As of 1-1-2017, impairment loss of values that represent a shareholding or equity stake in companies, whereby one of the following circumstances is met:

1. that, in the tax period in which the impairment is recorded, the requirements established in article 21 of the LIS are met, or
2. that, in the case of participation in the capital or equity of entities not resident in Spanish territory, the requirement established in letter b) of section 1 of article 21 of the LIS is not met in said tax period.

As of 1-1-2017, decreases in value caused by the application of the fair value criterion corresponding with values that represent a shareholding or equity stake, as referred to in the previous point, which are allocated to the profit and loss account, unless an increase in value corresponding to the same values of the same amount has been integrated into the tax base in advance.

With effect for tax periods beginning on or after 10-11-2018, it is established that the tax debt of the Tax on Property Transfers and Documented Legal Acts, Documented Legal Acts category, notarial documents, will not be considered a tax-deductible expense when it concerns mortgage loan deeds in which the taxpayer is a lender.

Article 15 n) of the LIS establishes a new assumption of non-deductible expense, according to which those expenses that are subject to the deduction regulated in said article 38 bis of the LIS will not be deductible, including those corresponding to the amortization of assets whose investment has generated the right to the aforementioned deduction.