Recognition of non-repayable grants: DGT criteria

Determining the fiscal year in which a non-repayable grant must be declared is a point of special attention for the correct settlement of Corporate Income Tax (IS). Recently, the Dirección General de Tributos (DGT) has specified the exact moment when these incomes must be recognized, linking the tax treatment to the accounting criteria.

What the DGT has resolved

The query concerned whether the grant should be recognized in the fiscal year the granting agreement is notified or at the moment the actual collection is materialized. The DGT has resolved that the recognition of income from non-repayable grants is carried out based on their purpose, in accordance with current accounting standards.

Following NRV 18 of the PGC, if the grant aims to ensure profitability or compensate for an operating deficit, it must be recognized in the fiscal year in which it is granted. Likewise, the right to collect must be recognized at the moment the granting agreement exists, regardless of when the funds are actually deposited into the entity's account.

What this means for you

For companies, this criterion establishes a direct connection between accounting and taxation. Since the Corporate Income Tax Law (LIS) does not contain rules that correct the accounting criteria in this matter, the tax treatment will be identical to that applied under the General Accounting Plan (PGC).

This implies that the recognition of income cannot be postponed until actual collection if a granting agreement already exists that provides the right to collect. The purpose of the grant will be the determining factor in deciding the corresponding accounting and tax year.

What should be done

It is necessary for entities to analyze the nature and purpose of each grant received to ensure that recognition takes place in the correct fiscal year. It must be verified that the recognition of the right to collect coincides with the existence of a formal granting agreement, avoiding discrepancies between the accounting records and the tax settlement. Each situation must be assessed individually to ensure compliance with the applicable regulations.