Doctrine by topic · DGT Observatory

Insolvency: evolution of DGT doctrine

How the DGT's position on this topic has evolved, and the rulings it rests on.

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How the DGT's position has evolved

Settled doctrine High confidence 35 rulings · 2014–2026

Current position

The deductibility of impairment losses on receivables requires that the insolvency circumstances of article 13.1 of the LIS (Corporate Income Tax Law) are met and that the expense has been recognized accounting-wise following the accrual principle. In the case of related parties, it is mandatory that the debtor is in insolvency proceedings with the opening of a judicial liquidation phase for the impairment to be deductible. If this requirement is not met, a positive extra-accounting adjustment must be made, allowing for reversal only when the receivable is written off accounting-wise as uncollectible.

The DGT's position remains constant regarding the requirement for insolvency circumstances to coexist with the accounting recognition of the expense. A specialization is observed in the treatment of related parties, where the opening of the judicial liquidation phase is the determining requirement for deductibility. The doctrine reinforces the need for prior accounting recognition to validate the tax deduction.

Turning points

  1. V0762-15

    Establishes that for receivables with related parties, the opening of the liquidation phase by a judge is necessary, or an accounting write-off as uncollectible if foreign regulations do not provide for a liquidation phase.

  2. V1859-23

    Reiterates the mandatory nature of the judicial liquidation phase for related debtors and specifies the need to make a positive extra-accounting adjustment in case of non-compliance.

Analysis based on 32 of 35 rulings with a stated position. Updated 23 September 2026.

Rulings on this topic

24
V2614-25 23 Dec 2025

Conditions for the tax deductibility of credit loss provisions under the LIS

SG de Impuestos sobre las Personas Jurídicas
deterioro de créditosbaja definitivainsolvenciaentidades vinculadasbase imponible LIS — Ley 27/2014 del Impuesto sobre Sociedades art. 10.3LIS — Ley 27/2014 del Impuesto sobre Sociedades art. 11
Affects CompanyExpat · Non-residentIndividual
V0727-17 21 Mar 2017

Loss due to insolvency of securities treated as negative capital gain

SG de Tributación de las Operaciones Financieras
rendimientos del capital mobiliarioinsolvenciadeuda subordinadabase imponible del ahorrovalor de adquisición LIRPF — Ley 35/2006 del IRPF art. 25.2.bLIRPF — Ley 35/2006 del IRPF art. 46
Affects CompanyExpat · Non-residentIndividual

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