Back to index
V2552-14 25 September 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · comunidades de montes vecinales

Refund of outstanding balance to the Administration following agreement termination is not a deductible expense

A community of communal lands consulted whether the reimbursement of a balance to the Administration upon the termination of an agreement constitutes a deductible expense. The DGT ruled that it does not, as such a refund represents the cancellation of a financial liability.

The question raised

Whether the reimbursement of the outstanding balance to the Administration upon the resolution of the agreement has the tax status of a deductible expense.

The DGT's ruling

The repayable advance provided by the Administration constitutes a financial liability that is settled with the income obtained. Therefore, the refund of the outstanding balance does not constitute an expense, but rather corresponds to the settlement of said financial liability.

Book your free first meeting