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V2015-14 25 July 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · reversión de deterioro

Reversión of loss on value decline not included in taxable base if no internal double taxation deduction from dividends

The DGT confirms that under the transitional provision 41 of the TRLIS, the reversal of value decline losses is not included in the taxable base where the dividend distribution did not give rise to an internal double taxation deduction.

The question raised

Whether the reversal of impairment that must be included in the tax base, in application of the provisions of the 41st transitional provision of the consolidated text of the Corporate Income Tax Law, will not be applicable to those impairments determined by the distribution of dividends that has not resulted in the application of the domestic double taxation deduction.

The DGT's ruling

The reversal of impairment losses on equity securities shall not be included in the tax base when such loss is determined by the distribution of dividends that has not resulted in the application of the domestic double taxation deduction. In the event that a right to deduction does exist, the reversal must be carried out taking into account the effectively proven taxation to avoid double taxation contrary to the spirit of the rule.

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