The four-year statute of limitations for the Administration's right to determine the tax debt through the appropriate assessment must be calculated from date to date, regardless of whether the last day of said period is a working day or a non-working day.
In this circular, we would like to inform you about the deadlines and conditions under which the Tax Authorities can verify your company's tax status. Below, we detail the general rules, special deadlines, and circumstances that interrupt the statute of limitations for tax obligations.
General Rule
Four-year period. The Tax Agency has four years to verify the self-assessment of a tax filed by your company. This period also applies to the time your company may correct said self-assessment. This period begins the day after the end of the regulatory deadline for filing the return, regardless of whether it was filed before that deadline.
Example: If your company files its Corporate Income Tax (CIT) return on July 10, the four-year period will begin on July 26 (the day after the general filing deadline).
Attention. In its judgment of April 17, 2024, the Supreme Court (TS) has established as doctrine that the 4-year statute of limitations for the Administration's right to determine the tax debt through the appropriate assessment, provided for in article 66 of Law 58/2003, General Tax Law, must be calculated from date to date regardless of whether the last day of said period is a working day or a non-working day.
Special deadlines
10 years for tax bases and deductions. For the verification of tax bases or quotas offset or pending offset, as well as deductions applied or pending application, the Tax Agency may initiate an audit within 10 years from the date they were generated and declared. It is crucial that your company retains the self-assessment and accounting records until the statute of limitations expires for the audit of the last tax year in which the tax bases or quotas were offset and the deductions were applied.
Assumptions of interruption
Interruption by the Tax Authorities. The statute of limitations is interrupted and the four-year period restarts if the Tax Authorities notify you of any action related to your tax return. This includes recognition, regularization, verification, inspection, securing, or settlement, even if the resolution is favorable to your company.
Example: If the Tax Authorities review the VAT deducted by your company in the fourth quarter of 2022 and the favorable resolution is notified on July 15, 2024, the statute of limitations is extended until July 15, 2028 for other aspects not previously reviewed.
Related obligations. The interruption also occurs if the Tax Authorities initiate an audit of obligations connected with a specific tax. For example, if the Tax Authorities consider that certain expenses are not deductible for Corporation Tax purposes, they may also consider that the VAT paid on those expenses is not deductible, thus interrupting the VAT statute of limitations.
Interruption by the company. Your company can interrupt the statute of limitations through its own actions, such as filing a supplementary return, correcting a self-assessment, or filing a claim or appeal regarding a tax return settled by the Tax Authorities.
Conditional incentives
Extension of the statute of limitations. The statute of limitations for incentives that depend on the fulfillment of a future condition can also be extended. For example, accelerated depreciation for job creation depends on the increase and maintenance of employment during the following two fiscal years. If the condition is met in 2024, the Tax Agency can verify the claim until July 25, 2029 (when the 2024 Corporate Income Tax returns expire).
Conclusion
It is essential to be aware of these deadlines and scenarios for proper tax planning and management. Remember that the four-year statute of limitations can restart if the tax authorities conduct an audit or if your company takes specific actions such as filing an amended return.
For any further questions or clarification, please do not hesitate to contact our team.
Warm regards,
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A Àmbit Assessor, SL has 40 years dedicated to the tax, comptable and labor consultancy of the Pime.
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