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V0710-16 23 February 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · consorcio

Payments between consortium members for additional goods and services may be deductible expenses for Corporate Tax

A query was raised regarding whether amounts paid between members of a consortium to offset additional goods and services are deductible for Corporate Tax purposes. The DGT ruled that these amounts are deductible expenses provided they comply with general deductibility rules and the corresponding income is included in the tax base.

The question raised

For the purposes of Corporate Income Tax, whether the amounts paid by the members of the consortium to other members of the consortium, to compensate for the additional goods and services committed to the client, shall be considered a tax-deductible expense. And whether the aforementioned amounts must be imputed by the members of the consortium in the tax period in which they accrue.

The DGT's ruling

The accounting income accrued by the members of the consortium that is assumed by other members must be included in their tax base. The expenses incurred to cover such additional goods and services shall be tax deductible if they meet the conditions of accounting registration, accrual basis, documentary justification, and are not considered non-deductible under the LIS. In the event of a related-party relationship, the transactions must be valued at market value.

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