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V1601-20 26 May 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · gastos financieros netos

Property tax expenses in a lease are not considered financial expenses subject to Article 16 LIS if not recorded under PGC item 13

A hospitality company inquired whether property taxes assumed under a financial lease agreement should be included in the limit for the deductibility of financial expenses. The DGT ruled that if these are not recorded in the financial expense accounts for accounting purposes, they are not included in the calculation of net financial expenses.

The question raised

Whether the limitations on the deduction of financial expenses established in Article 16.1 of the Corporate Income Tax Law shall not apply to the expenses derived from this agreement, due to its status as a tax levied on real estate property. Or, conversely, whether the limitation on the deduction of financial expenses exceeding the limits established in the aforementioned article must be applied, considering that the impact of the IBI is related to corporate indebtedness.

The DGT's ruling

Financial expenses for the purposes of the limit set forth in Article 16 of the LIS are those derived from corporate indebtedness, specifically those included in item 13 of the PGC (accounts 661, 662, 664, and 665). If the accounting standards applicable to the leasing agreement do not require the use of said accounts for their recording, the expense shall not be considered for the purpose of determining the net financial expense for the fiscal year.

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