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Tax news Royal Legislative Decree 3-2016

Tax news Royal Legislative Decree 3/2016

On 3 December 2016, Royal Legislative Decree 3/2016 was published in the Official State Journal, adopting tax-related measures aimed at consolidating the public finances and other emergency measures relating to social issues. The most important tax-related measures are as follows:

COMPANY TAX

With effect from 1 January 2016

  1. For taxpayers with a turnover of 20 million euros or more, the following restrictions on the offsetting of negative tax bases are introduced:

Net turnover


 Limit on the positive tax base 


Less than 60 million


50%


Equal to or more than 60


25%


 

In all cases, these taxpayers may offset negative tax bases up to the amount of 1 million euros.

  1. For taxpayers with a turnover of 20 million euros or more, the limit on the application of deductions to avoid double taxation is reduced to 50% of the tax due before relief.
  1. It is compulsory to include in the tax base any losses due to the impairment of shares deducted prior to 2013 in a minimum annual amount of 20%.

With effect from 1 January 2017

  1. Negative income resulting from share transfers that afford the right to apply the exemption for dividends and capital gains, and losses arising from shareholdings in companies that are domiciled in tax havens or low tax territories will become non-deductible expenses.
  1. Negative income obtained abroad as the result of the transfer of a permanent establishment will become non-deductible expenses.

WEALTH TAX

The requirement to pay this tax is extended throughout 2017.