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V0153-21 2 February 2021 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · bases imponibles negativas

Loss carryforwards transferred in a restructuring are not reduced if there is no risk of double compensation

A query was raised regarding whether the tax loss carryforwards of a transferring entity are reduced by the difference between the value of the contributions and their tax value during a restructuring. The DGT ruled that such a reduction will not apply, provided it is guaranteed that no double compensation of losses occurs.

The question raised

Question posed 1. Whether the negative tax bases of A pending compensation would be transferred in their entirety to the absorbing entity under the provisions of Article 84.2 of Law 27/2014, of November 27, on Corporate Income Tax, insofar as said negative tax bases may only be compensated once at the level of the transferee.

The DGT's ruling

The negative tax bases of the transferring entity that are transferred to the transferee shall not be affected by the limitations of Article 84.2 of the LIS, provided that there is no double compensation of the losses. The objective of the rule is to prevent the same loss from being utilized both at the level of the shareholders (due to impairment or transfer) and within the absorbing company. If the impairments linked to said bases have already reversed and been integrated into the tax base, the reduction of the negative tax bases by the difference between the value of the contribution and its tax value is not applicable.

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