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27 December, 2016

2016 Year–end Spanish Corporate Income Tax Checklist (II)

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Part II: There are new measures of interest to know on how to optimize your Spanish Corporate Income Tax for the closing of the 2016 fiscal year.

2016 Year–end Spanish Corporate income tax checklist (II)

Further to our last post, the Spanish Government has passed new regulations (Royal Decree 3 / 2016, of Dec. 02) affecting fiscal year 2016, which might impact your final 2016 Spanish Corporate Income Tax burden and whose main features are summarized below.

Besides, in a recent publication made by the Spanish tax authorities in their web page, they have made it clear that the changes affecting the Spanish Corporate Income Tax for the fiscal year 2016 shall not be applicable in the Corporate income tax advanced payments of this fiscal year. The last one of them is due on December 20 of this year.


The following limits are established in the compensation of tax losses carried forward as well as in the reversal of Deferred Tax Assets (DTAs) and the amounts of international tax credits to avoid double taxation:
– In relation to tax losses carried forward and DTAs, companies with a turnover exceeding 20 million € shall be subject to the following limits:
a. Companies with a turnover between 20 and 60 million €: 50 per cent.
b. Companies with a turnover exceeding 60 million €: 25 per cent.
– In addition to it, the amount of international double taxation tax credits is limited for companies with a turnover exceeding 20 million €. Such limit is set at 50% of the tax quote.

Reversal of portfolio impairments:
The reversal of portfolio impairments that were tax deductible in fiscal years previous to 2013, and which do not qualify as tax deductible as from such date, shall be taxed, at least, during the five fiscal years starting from 2016.
Prior to this rule entering into force, such reversal was due when the portfolio value at the end of the fiscal year exceeded that existing at the beginning of it or when a dividend was distributed.
With this new measure, a mandatory period of taxation of the impairment is ruled out, although it permits the reversal of amounts exceeding such five –years period if the circumstances referred to in the previous paragraph are met.
It must be noted that these measures have been passed to achieve the deficit compromise assumed by the Spanish Government before the EU authorities. Therefore, they all imply a restriction of tax – deductible opportunities by increasing the companies taxable results, once again.

There is more to come in our next post. So, please do not miss it!

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