Last Saturday, December 3, 2016, Royal Decree Law 3/2016, of December 2, was published in the Official State Gazette (BOE), which adopts measures in the tax field aimed at consolidating the Public finances and other urgent social measures.
Under this royal decree law, tax measures have been adopted aimed at consolidating public finances to promote growth and job creation and reduce the public deficit. In particular, these measures involve certain modifications in Law 27/2014, of November 27, on Corporate Income Tax (LIS); Royal Decree Law 13/2011, of September 16, which restored the Tax on Patrimony; Law 38/1992, of December 28, on Special Taxes; Law 58/2003, of December 17, General Tax; Law 20/1990, dated December 19, on the Fiscal Regime of Cooperatives, and Law 11/2009, of October 26, regulating the Listed Companies of Investment in the Real Estate Market (SOCIMI). In addition, the cadastral values of 2452 municipalities are updated.
The most significant changes have taken place in the area of corporate income tax (IS) and, in particular, affect the regime applicable to the offsetting of negative tax bases, the reversal of impairment of transferable securities and the exemption of capital gains By the sale of shares.
Some of these measures are applicable for tax periods beginning on or after January 1, 2016 and those beginning on or after January 1, 2017.
1. Corporate income tax
1.1. Measures that apply to tax periods beginning on or after January 1, 2016
A) Compensation of negative tax bases (articles 26.1 and 67e)
A.1) Large companies
A limit is again introduced for the offsetting of negative tax bases in the same terms as those set out in section g of the thirty-fourth transitory provision of the Corporate Income Tax Law for those entities whose net turnover is Less 20 million euros during the twelve months preceding the date of the beginning of the tax period. The new limit for offsetting negative tax bases is as follows:
– 50% of the taxable amount prior to the application of the capitalization reserve and its offsetting, where the net turnover in those twelve months is at least EUR 20 million but less than EUR 60 million Euros.
– 25% of the tax base prior to the application of the capitalization reserve and its offset, when the net amount of turnover in said 12-month period is at least 60 million euros.
The above limits will also apply to the offsetting of the taxable income of the tax group, as well as to the negative tax bases of any entity to be offset at the time of their integration into the tax group.
Additionally, for these companies, the minimum amount of compensation of 1 million euros disappears.
A.2) Small and medium-sized enterprises
The limitation on the offsetting of negative tax bases and other deterioration has not been confined to large companies only, and the limits applicable to small and medium-sized enterprises have been reduced.
Thus, those entities whose net turnover in the twelve months prior to the start of the tax period is less than 20 million euros will be limited to offset their negative tax bases at 60% of the tax base prior to the application of The capitalization reserve and its offset, instead of the 70% provided by the current wording of the Corporation Tax Law.
However, for these entities the minimum of one million euros is maintained. It should also be noted that, unless another regulatory change occurs, for 2017, the limit will be 70%.
B) New limit on provisions for impairment of credits or other assets derived from the possible insolvency of unrelated debtors that were not deductible, as well as contributions to social security systems that have generated deferred tax assets (articles 11.12, 62.1 Ey 67d)
B.1) Large companies
The limits on the integration of provisions for impairment of credits or other assets arising from the possible insolvency of unrelated debtors that were not deductible for breach of the six-month period since the obligation expired, as well as contributions to systems of Social security that have generated deferred tax assets are:
– 50% of the taxable amount prior to the application of the capitalization reserve and its offsetting, where the net turnover in those 12 months is at least EUR 20 million but less than EUR 60 million Euros;
– 25% of the tax base prior to the application of the capitalization reserve and its offset, where the net amount of turnover in the aforementioned 12 months is at least 60 million euros.
B.2) Small and medium-sized enterprises
For entities whose turnover in the 12 months before the start of the tax period is less than EUR 20 million, the 60% limit will also replace the current limit of 70% applicable to endowments For impairment of loans or other assets derived from the possible insolvency of unrelated borrowers that were not deductible for breach of the six-month period since the maturity of the obligation, as well as contributions to social security systems that have generated assets By deferred tax.
C) Joint limit on deductions to avoid international double taxation (Articles 31 and 32)
With effect also for tax periods beginning on or after January 1, 2016, for taxpayers whose net turnover is at least 20 million euros, during the twelve months prior to the date of commencement of the A 50% limit of the taxpayer’s entire taxable amount on the amount of deductions to avoid international legal and economic double taxation (Articles 31 and 32 LIS), the deduction of taxes paid On the occasion of the imputation of positive income due to the application of the rules of international tax transparency (article 100, item 11 of the LIS), and of the deduction to avoid international double taxation provided for in the twenty-third transitory provision of the Tax Law On Societies.
The limit is based on double taxation deductions generated in the year and on the amounts deducted from previous years.
D) Annual minimum to the reversal of losses due to impairment of securities deductible before January 1, 2013 (trans. Decimal sixteenth)
As a result of the approval of the Corporate Income Tax Law, impairment losses on the equity in the equity or equity of entities that were tax deductible in the tax periods beginning before January 1, 2013 were due To be included in the taxable income tax base in the period in which there was an increase in shareholders’ equity, with the limit in that increase, or when there was a distribution of dividends with the limit of the amount received.
However, Royal Decree Law 3/2016 introduces a minimum annual reversal without the need for a positive change in equity or dividend income of the investee, by virtue of which they will be integrated, at least, in equal parts into the tax base , The impairment losses that were tax deductible prior to January 1, 2013 during the five tax periods beginning on or after January 1, 2016.
In the event that, by application of the limit of the increase of own funds or dividend income, an amount greater than that corresponding to the previous annual linear minimum has been reversed, the balance to be reversed will be integrated by equal parts in the periods Taxes until the beginning of 2020.
In addition, in the case of transmission of the shares during the five tax periods indicated, the amount to be reversed must be included with the limit of the positive income obtained in the transmission.
1.2. Measures that apply to tax periods beginning on or after January 1, 2017
A) Exemption of capital gains from shareholdings and the regime applicable to negative income derived from the transfer of shares (article 21)
Through the approval of Royal Decree Law 3/2016, specialties are introduced in the computation of the exemption according to the nature of the partner of the investee:
– For restructuring operations in respect of which the non-integration of income in the taxable income tax or non-resident income tax (IRNR) basis has been determined, the exemption shall not apply to deferred income Arising from non-monetary contribution of assets and contributions from units when they do not meet the participation percentage or acquisition value of the holding, or when the entity whose shares are contributed does not fulfill in any of the years Taxation requirement at a minimum nominal rate of 10%.
– When the non-integration of income in the taxable income occurs in the area of personal income tax (IRPF) and comes from contributions of shares in entities, the transfer of shares by the entity that Received in the two years following the date of contribution will determine the non-application of the exemption for the positive difference between the tax value (ie, acquisition value of the contributing individual partner) and the market value at the time of contribution, Except that the individual partner had transferred its participation in the entity having been taxed in the income tax of individuals.
Also, as a consequence of the amendments introduced in article 21 of the Corporate Tax Law, the integration of negative income in its entirety, regardless of its membership in a group, is excluded under article 42 of the Commercial Code, In the event that the entity complies with the requirements to apply the exemption of capital gains on the transfer of shares provided for in section 3 of article 21 of the Corporate Income Tax Law. In the event that these requirements are partially fulfilled, the non-integration of the loss will be partial.
The total or partial non-integration of losses shall also apply to entities subject to corporate income tax and income tax of non-residents with permanent establishment participating in a listed public limited company in the property market and complying with the Requirements set forth in article 21 of the Corporate Tax Law. However, the non-application of the exemption with respect to the capital gains obtained in the transmission of the units is maintained.
In addition, a new limitation is added to the integration of negative income derived from the transfer of units in the event of the extinction of the investee entity. In this case, negative income will be reduced by the amount of dividends received in the ten years prior to termination that were entitled to exemption or deduction to eliminate double taxation and have not decreased the acquisition value.
B) Non-deductibility of the decrease in the value of units by application of the fair value criterion (trading book, article 15l)
In line with the restriction on the integration of losses arising from the transfer of shareholdings in the scope of application of article 21 of the Corporate Income Tax Law and non-deductibility of impairment of shares, a new assumption has been added Non-deductibility in Article 15.
Thus, with effect from January 1, 2017, the deductibility of value decreases by application of the fair value criterion is declared for the participations in resident entities that comply with the requirements established in article 21 of the Tax Law Companies and non-resident entities that do not comply with the minimum taxation of 10% provided for in paragraph 1 (b) of that article, unless an increase in value has been previously included in the taxable amount for the same amount.
C) Exclusion of negative income derived from the transfer of permanent establishments abroad (article 22)
As a consequence of the amendments introduced in article 22 of the Corporation Tax Law by Royal Decree Law 3/2016, with effect from January 1, 2017, the integration of negative income derived from the transfer of Permanent establishments and, on the other hand, the integration of said negative income in case of cessation of activity is maintained, with the same limits as foreseen in the previous version.
D) Negative income derived from the transfer of securities representing the equity interest or equity when the acquirer belongs to the group (article 11.10)
Due to the restrictions introduced in article 21 of the Corporate Income Tax Law on the integration of losses on the transfer of units, an accuracy has been introduced in article 11, paragraph 10, which establishes that Negative income by intragroup transmission shall be reduced by the positive income obtained in the transfer to third parties, provided that the minimum participation or acquisition requirement required by article 21 of the Corporate Income Tax Law is not met and, in the case of non- Residents, the minimum nominal tax requirement of 10% laid down in Article 1 (1) (b) is fulfilled.
E) Impairment losses on securities representing equity or equity (articles 13 and 15)
Although the non-deductibility of impairment losses on equity or equity was already provided for in the Corporate Income Tax Law, as a complement to the amendments made to article 21 of the law, the legislator Has been obliged to qualify said non-deductibility for both cases in which the requirement of participation or minimum acquisition value (article 15k) and for those in which it is not complied with (article 13.2) is met.
2. Tax system for cooperatives
As regards the changes introduced in the special tax scheme for cooperatives, for the years beginning on or after 1 January 2016, the compensation of negative shares is limited as follows:
– 50% when, in the 12 months before the start of the tax period, the net turnover is at least EUR 20 million but less than EUR 60 million.
– 25% when, in the twelve months before the start of the tax period, the net turnover is at least 60 million euros.
3. Special taxes
Royal Decree Law 3/2016 introduces changes in the tax rate of taxes on intermediate products, on alcohol and derived beverages, the artisanal distillation regime and the harvest regime.
In general, there is an increase in the tax rates with effect from December 3, 2016, highlighting the increase also when taxes are payable in the Canaries.
In relation to the tobacco tax, the Royal Decree increases the weight of the specific component against the ad valorem component for both cigarettes and binder.
4. General Tax Law
With effect from January 1, 2017, new cases of debts that may be deferred or split are established, while the following applications are declared inadmissible:
– in the case of debts of the holder that can no longer be deferred, the exception established so far in the cases set out in article 82.2b of the law is deleted;
– debts resulting from the execution of firm or partially dismissal decisions previously suspended during appeals or claims;
– debts arising from taxes levied, such as value added tax, unless it is proved that the contributions were not paid;
– debts for split corporation tax payments.
5. Tax on the estate
The application of the capital tax is extended to 2017 in the same terms as in 2016. Therefore, unless approved by a similar rule, a bonus of 100% at the state level would apply in 2018.
6. Coefficients of updating of cadastral values
The updating coefficients of cadastral values of article 32.2 of the Revised Text of the Real Estate Cadastre Law are modified, which will be applied to the municipalities included in Order HAP / 1553/2016, of September 29.
7. Immediate provision of information (SII)
It should be noted that, together with the measures adopted under Royal Decree Law 3/2016, the Council of Ministers has approved the Royal Decree amending amendments to the Value Added Tax Regulation to regulate the new supply system Information (SII) in the field of value added tax.
This system will enable the Tax Agency to improve fi scal control while establishing a new value added tax management system based on the keeping of the tax registration books through the agency’s electronic headquarters through Almost real-time delivery of billing records.
The group that will be included in the immediate supply of information is composed of all those taxable persons whose obligation to self-assess the value added tax is monthly (the taxpayers registered in the Monthly Tax Return Record (REDEME), the Large companies and the groups of said tax). Optionally, any other taxpayer who does not qualify can opt for the system.
The immediate supply of information will take effect on July 1, 2017. During the first half of its term, the information supply period will be eight days from the date of issue of the invoice, but after this transitional period , The term shall be four days.
I consulted tax advice Barcelona,
Advising companies since 1985