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V3289-20 5 November 2020 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · deducción por espectáculos

Deduction for performing arts expenses incurred in one tax year may be applied in a subsequent tax return

An entity inquired whether it could apply in 2017 a deduction for performing arts expenses incurred in 2015 without amending the tax return for that year. The Directorate General for Taxes (DGT) ruled that this is possible, provided the necessary certificate is obtained and all legal requirements are met.

The question raised

1. Whether the deduction generated in the 2015 fiscal year can be applied in the Corporate Tax return corresponding to the 2017 fiscal year, without the need to request a rectification of the Corporate Tax self-assessment corresponding to the 2015 fiscal year.

The DGT's ruling

The deduction for expenses in the production and exhibition of live shows is generated upon incurring the expenses, but its application requires obtaining the certificate from the National Institute of Performing Arts and Music. The failure to have included the deduction in the tax return for the fiscal year in which it was generated does not prevent its application in a subsequent return, provided that the requirements of Article 36.3 of the LIS are met. However, for the deduction to proceed, the taxpayer must assume the risk and venture of the production and exhibition, rather than being limited to contracting third parties to perform entertainment activities.

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