Back to index
V1976-14 23 July 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · doble imposición internacional

International double taxation deduction requires foreign tax assessment to be finally settled

A company asks whether it can deduct foreign tax paid if the foreign assessment is under appeal. The DGT responds that tax is not considered paid until contested assessments are finally settled by a judicial ruling.

The question raised

1. Whether the right to claim the deduction for international double taxation under Article 31 of the Recast Text of the Corporate Income Tax Law arises at the moment of the effective payment of the tax in the other state, regardless of whether the assessment of said tax is being contested abroad and a refund thereof has been requested.

The DGT's ruling

To apply the deduction provided for in Article 31 of the Recast Text of the Corporate Income Tax Law, the tax must be effectively paid abroad. An amount for a tax of an identical or analogous nature to Corporate Income Tax shall not be considered paid until the contested assessments are confirmed by a final judicial ruling. The deduction must be made in the tax period in which the amounts become final.

Book your free first meeting