Skip to content
Back to index
V1487-18 31 May 2018 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · bases imponibles negativas

Offsetting tax losses depends on meeting activity and entity nature requirements

A query was raised regarding whether a company can offset tax losses generated before its control was acquired by a third party. The DGT indicates that, as 100% of the company was acquired following a period of holding less than a 25% stake, the ability to offset losses is conditional upon meeting specific requirements regarding the entity's activity and nature.

The question raised

Whether the negative tax bases existing prior to the aforementioned purchase are 100% deductible, and if, conversely, they were not 100% deductible, exactly which negative tax bases the consulting company may offset.

The DGT's ruling

The limitation on the offsetting of negative tax bases under Article 26.4 of the LIS applies if the majority of capital is acquired after having held a stake of less than 25%. In this case, if any of the circumstances regarding economic activity, change of activity, patrimonial entity, or reduction in the index of entities are also met, the bases may not be offset. As the fulfillment of said additional circumstances has not been clarified, it is not possible to determine the possibility of offsetting.

Book your free first meeting