Discover the key factors to consider when preparing for the 2015 fiscal year-end, regarding Corporate Income Tax
In this second installment, we continue our list of new developments and items to check in order to prepare for the closing of the 2015 fiscal year and, more specifically, to correctly handle the settlement of Corporate Income Tax:
– Deductible expenses: Check if any of the expenses you have recorded throughout the year are not tax-deductible and identify them as such. In this regard, you might consider whether it is advisable to extend the participating loans that your company holds with other companies in the group (interest paid is not deductible, but interest received may be exempt) or how you should finance the purchase of shares in other companies that make up the group. Also, check if your net financial expenses exceed one million euros and represent more than thirty percent of the net profit for the year; verify if your expenses for customer hospitality exceed 1 percent of net turnover; ensure that the remuneration received by the board of directors is deductible; and determine if you need to adjust expenses for severance payments resulting from the termination of an employment relationship.
– Related Party Transactions: Identify which of your company's transactions qualify as related party transactions and, if applicable, prepare the necessary documentation to prove the market valuation that must be applied. Holding less than 25 percent of the company's capital may prevent transactions between the shareholder and the company from being treated as related party transactions, and similarly, director compensation for services rendered in this capacity is not included in this section.
– Dividends: Dividend exemptions apply to holdings of less than five percent, provided the acquisition value of those shares exceeds twenty million euros. Furthermore, if the investee company is non-resident, it must tax its profits at a nominal rate of at least ten percent. The same criteria apply to the exemption of income obtained abroad through a permanent establishment.
– Establish a capitalization reserve. As a new feature for the 2015 tax year, it is possible to reduce the taxable base of the tax by an amount equivalent to ten percent of the increase in equity provided that this increase is maintained for five years (unless it is due to the occurrence of accounting losses) and an unavailable reserve is established for the amount of the reduction.
– In the event of negative taxable income, it may be offset against future tax years, without time limit and up to an amount of one million euros. Beyond this amount, a limit of 70% of the taxable income prior to the application of the reserve mentioned in the previous section is established.
– Please note that, although the general tax rate is falling to 28%, next year it will decrease to 25%.
– R&D&I : If your company carries out research and development or innovation activities , consider applying for the deduction under Article 35 of the Spanish Corporate Income Tax Law (LIS), properly document the project, and try to ensure its inclusion. Systems: reasoned report / advance pricing agreements / binding consultations.
– Deductions for job creation or for workers with disabilities are also maintained
– Small businesses: Finally, we remind you that if your company's turnover is less than €10 million, you may be eligible for the special tax regime for small businesses. Therefore, it is advisable to familiarize yourself with this regime when, for example, making investments and seeking to take advantage of accelerated depreciation options. In this tax year, the deduction for reinvestment of profits is eliminated, the accelerated depreciation of low-value assets is extended to all types of businesses, and accelerated depreciation for investments made during the tax year is maintained as a feature of this regime. It is also worth noting the introduction of the equalization reserve , which allows for a 10% reduction in the taxable base, provided that the resulting negative taxable base is reduced in the following five tax years or added to the positive taxable base in the fifth year (deferral).
In corporate taxation, a thorough understanding of the subject makes all the difference. We invite you to consult us about your specific circumstances via email at ambit@ambitassessor.com or at our offices.
We are experts in national and international taxation and would be happy to help you.
Marc Ivars – Tax Area
Follow all our news, and discover even more about us on our social media channels.
Do you have any questions about this topic?
Our team of expert advisors will help you resolve any issues related to our services.
Contact us now
A Àmbit Assessor, SL has 40 years dedicated to the tax, comptable and labor consultancy of the Pime.
Latest entries from MGI Àmbit
(see all)
Related
