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V0622-15 19 February 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · pagos ecualizados

Equalised payments to non-resident entities may be deductible corporate expenses

A company inquired whether equalised payments to non-resident entities could be considered deductible expenses and whether the treatment differs if accounted for net or separately. The DGT confirms that such payments are deductible if they comply with general deductibility rules and do not arise from the status of a shareholder.

The question raised

Tax treatment in Corporate Income Tax regarding equalized payments that the consulting entity would pay to non-resident entities. The consulting entity understands that the equalized payment satisfied by the non-residents to the consulting entity shall be considered both accounting and tax income. Whether the previous understanding would be affected in the event that equalized payments were accounted for separately as income and an expense, or if only the net result of the equalization were accounted for in each financial year.

The DGT's ruling

Equalized payments shall be considered tax-deductible expenses if they meet the conditions of accounting entry, accrual, correlation of income and expenses, market value assessment in the case of related-party transactions, and documentary justification. These payments must arise from business collaboration and not from the status of a shareholder in the entity. For accounting purposes, the offsetting of income and expenses is not permitted unless expressly provided by regulation, and they must be recorded separately.

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