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V3960-16 20 September 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · base imponible

Foreign corporate tax not deductible except for undeducted excess

A company asks whether corporate tax paid in the Dominican Republic is deductible in Spain. The DGT responds that it is not a deductible expense, except for the amount that cannot be deducted under the full quota via the international double taxation deduction method.

The question raised

Whether such taxes are deductible in Spain.

The DGT's ruling

Corporate income tax expenses are not tax-deductible. However, the portion of tax paid abroad that is not subject to deduction from the total tax liability may be considered a deductible expense in the taxable base, provided that it corresponds to the performance of economic activities abroad.

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