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V0268-15 23 January 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · provisión para siniestros pendientes de declaración

Allowance for outstanding claims not reported is deductible only up to the minimum amount established by applicable regulations

An insurance company has requested clarification on the amount of allowance for outstanding claims not reported that is deductible for Corporate Tax purposes when using authorised statistical methods. The DGT has ruled that only the amount constituting the minimum requirement under the Private Insurance Management and Supervision Regulations shall be deductible.

The question raised

Question raised: Amount of the allocation to the provision for claims pending reporting that is considered a tax-deductible expense in Corporate Income Tax.

The DGT's ruling

Expenses for technical provisions of insurance companies are deductible up to the amount of the minimum amounts established by the applicable regulations. In the case of using statistical methods, the allocation shall be deductible if it is considered a minimum amount in accordance with paragraphs 2 and 3 of the third additional provision of the ROSSP. The amount exceeding said minimum amount shall not be a tax-deductible expense.

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