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V0455-14 19 February 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · ajuste negativo

Negative adjustment not allowed for corporate tax on tax refund to former shareholders

A company asks whether it can apply a negative adjustment to its corporate tax base for a tax refund it will receive to pay former shareholders of an acquired company. The DGT responds that, as this is a third-party transaction, there will be no income or expenses in the profit and loss account.

The question raised

1) Regarding the amount of the refund derived from the claim relating to Corporate Income Tax 96-99, should it occur, whether a negative adjustment to the accounting result may be made for the calculation of the Corporate Income Tax taxable base, derived from the portion corresponding to the tax liability.

The DGT's ruling

The entity must account for the receipt of the refund and the subsequent payment to the former shareholders as a transaction on behalf of third parties, affecting the balance sheet but not the profit and loss account. As no accounting income or expense is recognized, the transaction will have no impact on the Corporate Income Tax taxable base in the period in which the settlements become final, pursuant to Article 10.3 of the TRLIS.

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