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V0048-17 13 January 2017 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · consolidación fiscal

Individual tax base must align with the hedge classification applied at the tax group level

A company inquired whether it should amend its individual hedge accounting to match the tax consolidation treatment. The DGT ruled that the requirements for accounting or tax classification refer to the tax group for the purpose of determining the tax base.

The question raised

1. Whether Article 62.1 of the Corporate Income Tax Law implies that, in the case presented, the hedge accounting practiced in the individual accounts must be disregarded for (consolidated) tax purposes and the individual accounting result must be modified for tax purposes alone, or whether the results temporarily recorded in equity must be included in the tax base.

The DGT's ruling

The individual tax base of an entity must be adjusted to the hedge classification that corresponds within the tax group. In this case, the entity's tax base must be adjusted to provide the financial liability with the treatment of hedges of a net investment in a foreign operation. The results generated by said hedge shall be subject to elimination as they derive from an internal transaction that generates income at the consolidated tax level.

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