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V2969-23 13 November 2023 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · gastos financieros netos

Financial expenses for the acquisition of entities within a tax group are subject to a double deductibility limit

A company inquired whether the interest on a loan to acquire a company was deductible up to one million euros, even if the operating profit of the group (excluding the acquired entity) was negative. The DGT responds that the special limit of Article 67.b) must be applied first, followed by the general limit of Article 16.

The question raised

Question posed: Whether the interest derived from the loan signed by the inquiring entity can be deducted up to the amount of one million euros or, conversely, if said amount is not applicable under the rule established in Article 67.b) of Law 27/2014 of November 27, on Corporate Income Tax. That is, whether, considering that the operating result of the Consolidated Group, excluding the operating result of the acquired entity X, is negative, the accrued interest from the loan intended for its acquisition is deductible up to the limit of one million euros, or conversely, is not deductible.

The DGT's ruling

Financial expenses from debt intended to acquire entities that join a tax group are subject to an additional limit of 30% of the acquirer's operating profit, excluding the profit of the acquired entity. This special limit is applied first; once determined, the result is added to the remaining expenses to apply the general limit of 30% of the group's operating profit or the one million euro threshold. If the operating profit of the acquirer (excluding the acquired entity) is negative, no financial expenses can be deducted under the special limit, and the one million euro minimum under Article 16.1 is not applicable.

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