Reductions in the taxable base
When can you reduce your tax base?
Reduction: Income from certain intangible assets
Income derived from transferring the right of use or exploitation of patents, drawings or models, plans, formulas or secret procedures, or rights on information regarding information relating to industrial, commercial or scientific experiences, will have the right to a deduction of the gross tax base, whereby the deduction is the percentage achieved from multiplying the result of the following formula by 60%:
In the numerator, expenses incurred by the entity directly related to the creation of the asset, including those derived from sub-contracting with unassociated third parties. These expenses will be increased by 30% where the numerator cannot in any case exceed the amount of the denominator.
In the denominator, expenses incurred by the entity directly related to the creation of the asset, including those derived from sub-contracting and, if applicable, the acquisition of the asset.
In no case shall the aforementioned coefficient include financial expenses, repayments on properties or other expenses not directly related to the creation of the asset.
This is also applicable in the case of transfers of intangible assets related thereto, when the transfer is between associated entities.
For the application of the reduction provided for in article 23 of the LIS the following requirements must be met:
That the assignee uses rights of use or exploitation to carry out a business activity and that the results of said use are not materialised in the delivery of goods or provision of services by the assignee that generate fiscally deductible expenses in the ceding company, provided that, in this latter case, said company is linked to the assignee.
That the assignee does not reside in a tax-free country or territory or one that is classified as a tax haven, unless it is in a European Union member state and the taxpayer can prove that the operations are for valid economic reasons.
When a cession contract includes additional service provisions, said contract should differentiate the payment corresponding to them.
The company has the accounting records required to determine the direct income and expenses corresponding with the assets being transferred.
Until June 30, 2016 , in the case of transfer of intangible assets, for the purposes of their integration into the tax base for 40% of their amount, regardless of whether the whether or not the asset is recognized in the entity's balance sheet, income will be understood as the positive difference between the income for the year from the transfer of the right to use or exploit the assets, and the amounts that are deducted therein by application of articles 12.2 or 13.3 of the LIS , where applicable, and for those expenses of the year directly related to the transferred asset.
Since July 1, 2016 , in the case of transfer of intangible assets, for the purposes of their integration into the tax base with the reduction provided for in article 23 of the LIS, with Regardless of whether or not the asset is recognized in the entity's balance sheet, income will be understood as the positive difference between the income for the year from the transfer of the right to use or exploit the assets, and the amounts that are deducted in the same by application of article 12.2 of the LIS, if applicable, and for those expenses of the year directly related to the transferred asset.
In no case will income from the transfer of the right of use or exploitation, or the transmission, of trademarks, literary, artistic or scientific works, including cinematographic films, personal rights susceptible to transfer, such as the rights to image, computer programs, industrial, commercial or scientific equipment, or any other right or asset other than those indicated in section 1 of article 23 of the LIS .
Prior to carrying out the operations, the taxpayer may request from the Tax Administration a prior agreement to classify the assets as belonging to any of the categories referred to in article 23.1 of the LIS , and valuation in relation to the income from the transfer of those and the associated expenses, as well as the income generated in the transmission.
This application will accompany an assessment proposal, which will be based on market value.
The proposal will be considered rejected following the resolution period.
The resolution of this agreement will require a binding report issued by the Directorate General of Tax Contributions, in relation to the rating of the assets. In the event it being considered appropriate estimate, the Directorate General of Tax Contributions may request a non-binding opinion in this regard from the Ministry of Economy and Competitiveness.