{"id":14604,"date":"2017-03-09T08:35:22","date_gmt":"2017-03-09T08:35:22","guid":{"rendered":"http:\/\/www.pbs.es\/icac-aclara-tratamiento-contable-la-nueva-regulacion-fiscal-los-deterioros\/"},"modified":"2023-11-07T09:09:20","modified_gmt":"2023-11-07T09:09:20","slug":"accounting-management-of-the-new-tax-regulations-for-portfolio-impairments","status":"publish","type":"post","link":"https:\/\/www.pbs.es\/en\/accounting-management-of-the-new-tax-regulations-for-portfolio-impairments\/","title":{"rendered":"Accounting management of the new tax regulations for portfolio impairments"},"content":{"rendered":"

CAC main guidelines: The tax treatment of portfolio impairment, how the mandatory reversal has to be treated, from an accounting view \u2013 point and how portfolio impairment losses are treated, for accounting purposes. The Spanish Accounting and Auditing Institute (ICAC)<\/a> has made public a consultation on the accounting treatment of the tax changes introduced by Royal Decree 3 \/ 2016, of Dec. 02, in relation to the tax treatment of portfolio impairment losses, which affect their reversal and the tax deduction of portfolio impairments.
\nWe remind you that this is a new treatment that partially entered into force in fiscal years started as from Jan. 01, 2016, despite the fact that the measure was introduced through the mentioned regulations of Dec. 02, 2016.<\/p>\n

Let\u2019s see which are its main guidelines.
\n✔\u00a0 The tax treatment of portfolio impairment<\/strong><\/p>\n

The tax measures that are dealt with in the ICAC Resolution are the following ones:<\/p>\n

From Jan. 01, 2016: losses deriving from portfolio impairment that were considered as tax \u2013deductible prior to Jan. 01, 2013, have to be reversed and included as taxable profits within the subsequent five fiscal years, despite the fact that the general reversal rules that were previously in force apply. If the portfolio is transferred, then the amounts pending reversal shall be taxed up to the limit of the positive difference resulting from the transfer.
\nFrom Jan. 01, 0217: impairment losses are ruled as a non \u2013 deductible, whenever they related to affiliated entities whose shareholding qualifies for the exemption of article 21 of Spanish Corporate income tax Law or that do not comply with the minimum required level of taxation, when they are not resident. It is, therefore, not possible to recover the loss that may have been disallowed in the past, from a tax view \u2013 point.<\/p>\n

✔\u00a0 How the mandatory reversal has to be treated, from an accounting view \u2013 point<\/strong><\/p>\n

Due to the new qualification of portfolio impairments as non tax \u2013 deductible, the book to tax adjustments that need to be done in the following four years have to be qualified, for accounting purposes, as a permanent difference. Such a difference affects the current Corporate income tax expense and does not, therefore, generate any deferred tax liability. As exceptional cases, the company could have recognised a deferred tax liability based on the previous tax regulations or foresee the liquidation of the subsidiary, in which case the recognition of a deferred tax asset would be justified.<\/p>\n

✔\u00a0 How portfolio impairment losses are treated, for accounting purposes<\/strong><\/p>\n

As these losses are no longer tax \u2013 deductible, the temporary difference that may have been recognised in the past has to be re \u2013 qualified as permanent difference. At the closing of fiscal year 2016, any deferred tax asset should be cancelled, unless its reversal is likely due to the subsidiary\u2019s extinction.<\/p>\n

\n

PBS is your outsourcing partner for managing taxes in Spain<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

ICAC consultation of tax changes introduced by Royal Decree 3 \/ 2016, of Dec. 02, in relation to the tax treatment of portfolio impairment losses.<\/p>\n","protected":false},"author":2,"featured_media":14599,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[1341,997],"tags":[1461],"class_list":["post-14604","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-aeat-spanish-tax-agency","category-expertos-en","tag-aeat2017"],"yoast_head":"\nAccounting management of new tax regulations for portfolio impairments<\/title>\n<meta name=\"description\" content=\"The Spanish Accounting and Auditing Institute (ICAC) has made public a consultation on the accounting and tax regulations in portfolio impairment losses.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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