The Royal Decree-Law 3/2016, of 2 December, has been published in the Official State Gazette, which adopts certain measures of reform in the tax area that, in general, will enter in force on January 1, 2017. Implementing tax measures aimed at the consolidation of public finances and other social measures (the Decree), was published in the Official Gazette.
The main measures concerning taxation are summarized below.
Corporate taxation:
Regarding corporate income tax, although the nominal rate (25%) of the tax is maintained, certain measures are implemented that limit the tax deductibility of certain items of expenditure in a way that increases the taxable base of the tax and raises the taxation effective, ie, the legislator seeks more revenue via the “widening of the tax base”.
No deductibility of losses or losses that are manifested by the transfer of shares in entities, provided that in the case of shares entitled to the exemption in the obtained positive income, both dividends and capital gains on the transfer of shares .
Likewise, losses generated by the participation in entities located in tax havens or in territories that do not reach an adequate level of taxation shall not be included in the taxable income.
Limitation to offset the loss carry forwards (BIN’s) and deduction of certain expenses and costs: consolidates, in general for all types of entities, the limit of 60% for tax periods beginning in 2016, in relation to The deduction for impairment of credits and insolvencies and the compensations of negative tax bases of previous years.
In addition, it increases the restrictions for the deduction of impairments and compensation for those companies with a turnover of more than 20 million euros.Specific,
- Companies with a net turnover of more than 60 million euros, the limit will be 25%.
- The companies with a net turnover of between 20 and 60 million euros, will be 50%.
These taxpayers will have a new limit for the application of double taxation deductions, 50% of the total tax.
