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V0152-15 19 January 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · establecimiento permanente

Losses from foreign permanent establishments not deductible from 2013

An airline asks whether losses from its permanent establishments in France and Italy are deductible. The DGT clarifies that, under Law 16/2013, these negative revenues are not included in the taxable base, except in cases of transfer or cessation of activity.

The question raised

1. Whether, in accordance with the provisions of Article 14.1 of the TRLIS as amended by Law 16/2013, the losses obtained by each permanent establishment abroad in 2013 are not deductible for Spanish Corporate Tax purposes, without prejudice to the non-deductibility of part of said losses in France and Italy, respectively.

The DGT's ruling

Negative income obtained by permanent establishments abroad from 2013 onwards is not deductible from the tax base. If positive income is subsequently obtained, it shall not be integrated until the previously non-integrated negative income has been offset. For losses prior to 2013 that were integrated, future positive income shall be integrated without right to exemption or deduction until such losses are exceeded. This criterion applies regardless of the regulations of the countries where the establishments are located.

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