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V2518-20 23 July 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · gastos financieros netos

Article 16 LIS financial expense limitation does not apply to expenses already non-deductible under Law 49/2002

A foundation enquired whether it was required to report the limitation of financial expenses in Form 200, and whether this applied when all its income was exempt and its expenses were non-deductible. The DGT ruled that financial expenses that are non-deductible under Law 49/2002 are not included in the calculation of net financial expenses under Article 16 of the LIS.

The question raised

Whether the section "Limitation on the deductibility of financial expenses under Article 16 of Law 27/2014, of November 27, on Corporate Income Tax" should be reported in Form 200 and whether said limitation would be applicable in the event that all of the Foundation's income is exempt from Corporate Income Tax and all expenses were non-deductible (including financial expenses).

The DGT's ruling

The limitation under Article 16 of the LIS applies to financial expenses that are not subject to other limitations under the Law. Consequently, if the entity's financial expenses are non-deductible due to the application of Article 8.2.a) of Law 49/2002, these must not be taken into consideration when determining the net financial expense for the fiscal year pursuant to the LIS. Regarding the obligation to report in Form 200, the DGT does not issue a ruling due to lack of jurisdiction.

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