Other tax-deductible concepts. Losses due to impairment of the value of assets. Deductible amounts.

Losses due to impairment of the following assets will be tax deductible, subject to the limits and exclusions established in article 12 of the Corporate Income Tax Law:

1. Losses due to impairment of credits arising from possible insolvency of debtors will be deductible when any of the following circumstances occur at the time of the tax accrual:

   1. That six months has passed since the obligation fell due.

   2. That the debtor is declared to be in bankruptcy proceedings.

   3. That the debtor is being tried for asset stripping.

   4. That the obligations have been claimed by the courts or are in litigation or arbitration proceedings, the solution of which depends on their collection.

   Losses in respect of the credits mentioned below shall not be deductible, except when they are the subject of an arbitration or judicial procedure that concerns their existence or amount:

   1. Those due or guaranteed by public law bodies.

   2. Those guaranteed by credit institutions or reciprocal guarantee societies.

   3. Those guaranteed by in rem rights, agreement of reservation of ownership and right of retention, except in the cases of impairment or deterioration in the guarantee's value.

   4. Those guaranteed by a credit insurance contract or a performance bond.

   5. Those that have been subject to express renewal or extension.

   Losses for the coverage of the risk arising from possible insolvency of persons or entities linked to the creditor will not be deductible, except in the case of judicially declared insolvency, nor will losses based on global estimates of the risk of insolvency of clients and debtors.

2. The original purchase price of intangible fixed assets corresponding to goodwill will be deductible, with the maximum annual limit of one twentieth of its amount, provided that the following requirements are met:

   1. That it has been declared by virtue of a payment-based purchase.

   2. That the purchasing and transferring entities do not form part of a group of companies according to the criteria laid down in Article 42 of the Commercial Code, regardless of their residence and the obligation of formulating consolidated annual accounts. If both entities form part of a group, the deduction will be applied with regard to the purchase price of the goodwill paid by the transferring company when it acquired it from non-associated persons or entities.

   3. That a restricted reserve has been established for, at least, the tax deductible amount, in the terms set out in commercial legislation. If this reserve cannot be allocated, the deduction is conditional on it being allocated from the first profits of the following years.

   This deduction is not conditional on its annotation in the profit and loss account. The quantities deducted will reduce, for tax purposes, the value of the goodwill.

3. When the requirements set forth in paragraphs a) and b) above are met, intangible fixed assets with an indefinite useful life will be deductible up to a maximum annual limit of one tenth of their value.

   This deduction is not conditional on its annotation in the profit and loss account. The amounts deducted will reduce, for tax purposes, the value of the fixed assets.