Deductibility of an expense at a later period

TEAC (Central Economic-Administrative Court) 8-10-19

The question that arises focuses on the possibility of allocating to a specific fiscal year (in this case, 2009), an expense that is recognized in a previous fiscal year (in this case, 2007). That is, it is about assessing under what conditions tax expense can be charged to a subsequent year, an expense accounted for in a previous year.

The conflict has its genesis in the request for rectification of the self-assessment by IS of the fiscal year 2009. The appellant intends to allocate to that year the expense related to the provision for insolvency, which was denied in 2007, for not having elapsed six months from the expiration of the obligation (LIS / 04 art.12.2.a).

In its resolution, the Court first draws attention to the fact that in 2008 the taxpayer could apply the provision, and that exercise was not prescribed at the time of requesting the rectification. It is, therefore a deductible expense in that year.

As a result of the regulatory regulations of the tax, and provided that it does not imply lower taxation, the deductibility of an expense in a later period must be admitted, resulting, on the contrary, the impossibility of deferring the imputation when lower taxation is derived.

Regarding the possibility of appreciating lower taxation in the case of negative tax bases, the TEAC shares the criteria of the DGT (DGT 2-11-05 0273-05), so that of the self-assessments of the IS of the 2008 and 2009 fiscal years it follows that in those exercises negative tax bases were generated. The allocation of an expense to an exercise after the corresponding one supposes the extension of the term to compensate said negative bases, giving rise, therefore, to lower taxation. Therefore, it is inappropriate to recognize, in 2009, the deductibility of an expense corresponding to 2008.

Based on the foregoing, the Court concludes that in the case raised, the deferral claimed by the appellant cannot be admitted because the imputation to the 2009 financial year, would imply lower taxation.