The Treasury takes measures, once again, to avoid tax fraud and tax avoidance and, at the end of January, published the 2020 Tax Control Plan in which special attention is paid to the bases negative in Corporation Tax.

What are negative tax bases in IS?

Among the reductions regulated by the Corporation Tax, one of the most important is the compensation of negative tax bases.
Negative tax bases represent the right to offset the result of the current statement regarding the company’s losses in subsequent years. In this way, the amount to be paid can be reduced.

In addition to the foregoing, the Corporation Tax Law does not establish a time limit for this reduction. Still, it establishes a quantitative limit that corresponds to 70% of the tax base before applying the capitalization reserve and its integration. On the other hand, it is established that negative bases may be offset up to one million euros or the proportional part for periods of less than one year.
In large companies, the fifteenth additional provision of the Corporation Tax Law establishes different limits that apply to large companies based on their turnover.

What checks will the Treasury carry out?

The term that the Treasury has to verify the negative tax bases already compensated or pending compensation is ten years.

Depending on the 2020 Tax Control Plan, the Treasury will verify the negative tax bases already applied and pay special attention to those that are pending compensation in the coming years.

The Treasury will control the reductions in the tax base due to expenses, the lack of declaration of income or the creation of structures abroad that imply the non-taxation of profits in Spain. In this way, the existence of undeclared permanent establishments that benefit from tax havens will be fought.

Why hire a tax expert?

The new Tax Control Plan focuses on companies. Therefore, it is essential to carry out an exhaustive control of the operations carried out to avoid an inspection by the Treasury or a possible sanction.

Hiring a tax expert is essential to:

  • Check that the compensation of negative tax bases is done correctly.
  • Have at your disposal a person who knows the tax regulations thoroughly.
  • Present the corresponding taxes on time.
  • Avoid inspections and sanctions by the Treasury.
  • Save time and effort in preparing taxes.
  • Focus on the business and leave the day-to-day taxes in the hands of specialized tax specialists.
  • Ultimately, it is about taking precautions and strictly complying with the law to avoid penalties and surcharges that may affect the liquidity of your business and cause you significant damage.