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V2823-15 29 September 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · bases imponibles negativas

Negative tax bases may be offset against income from a new activity if there is no change of control

An entity has inquired whether it can use its previous negative tax bases to offset profits from a new economic activity. The DGT has ruled that this is permissible provided that the limitations regarding change of control under Article 26.4 of the Corporate Tax Act are not met.

The question raised

Whether the entity may offset the generated negative tax bases, which have been subject to tax settlement or self-assessment, against the positive income generated in the performance of the newly initiated activity in subsequent tax periods.

The DGT's ruling

It is possible to offset negative tax bases against positive income from subsequent periods, respecting the offset limits set forth in Article 26.1 of the LIS. The prohibitions on offsetting shall not apply if the circumstance arises where the majority of the share capital has been acquired by related persons or entities following the generation of the negative base. The entity must substantiate the origin and amount of said bases through tax returns, accounting records, and supporting documentation.

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