The Spanish Corporation tax compliance season for companies having a fiscal year coinciding with the calendar year is about to start soon, as tax returns must be submitted within six months and twenty – five days as from the closing of the fiscal year.
This season will be the first one including the new tax measures approved by the Spanish tax reform. We have listed below the main ones affecting the calculation of the taxable base, that you should be aware of, well in advance, to take advantage of the tax opportunities offered by Spanish regulations.
✔ Tangible assets’ depreciation
The table of tax depreciation rates that states maximum per annum rates as well as maximum years of the asset’s useful life has been simplified. A transitory system was passed for assets having a different useful life because of the change in the rates. This implies recalculating the asset’s pending life and the new annual depreciation.
Companies not qualifying as small – sized entities can negatively revert positive book to tax adjustments for the non – deductible 2013 & 2014 depreciation.
The accounting depreciation that was disallowed is now tax deductible within a straight 10 years period or during the asset’s useful life, at the taxpayer’s election.
As the recovery of the disallowed depreciation is and will be done in fiscal years in which the Corporation income tax rate is progressively reduced (to 28% and 25%), taxpayers can apply a new tax credit of 5% (2% in 2015) of the yearly negative book to tax adjustment.
✔ Intangible assets’ amortization
Intangible assets with a limited useful life can be amortized, for tax purposes, according to their useful life. Those with an unlimited useful life can be amortized over a twenty – year period (implying an annual 5% rate). This 5% is reduced to a 2% in fiscal year 2015.
Attention: For fiscal years starting from January 01 2016, all intangible assets are considered as having a limited useful life and have, therefore, to be amortized for accounting purposes. In the event that the asset’s useful life cannot be estimated, the useful life is set at 10 years.
✔ Assets’ impairment
Tangible assets impairment (including real estate investments) is disallowed, for the purposes of calculating the Corporation tax result. Only impairments related to stock and bad debts can be deducted, subject to compliance of accounting and specific tax requirements, respectively.
Please note that the submission deadline cannot be deferred. There are specific steps that your company must follow to report and pay Corporation tax. Remember to appoint an accountant or a tax adviser to help you with Corporation tax.
There is more to come in our next post. So, please do not miss it!