To address the analysis of the accounting aspects of Corporate Tax we must take into account what is established in article 10 of Law 43/1995 of the Corporation Tax:
The Taxable base shall be constituted by the amount of the income in the tax period Minorada by the compensation of negative taxable bases of previous periods.
The Taxable basis shall be determined by the direct estimation scheme and, in a subsidiary form, by indirect estimation, in accordance with the provisions of the General Tax Law.
In the direct estimation scheme The taxable basis shall be calculated by correcting, by applying the precepts established in this Law, the accounting result determined in accordance with the rules laid down in the Trade Code, in the other Laws In respect of such determination and in the provisions which are dictated in the development of the abovementioned standards.
Thus, for tax purposes, the accounting result must be corrected by applying the appropriate legal precepts to determine the taxable tax base. That Is to say that there are obviously differences between the accounting criteria and the tributaries.
Let’S See below the basic concepts that are evident when comparing the accounting and tax regulations:
Temporary Differences (Dt): those that are manifested in an exercise and are compensated in one or more subsequent exercises.
Permanent Differences (DP): those that are manifested in an exercise and do not affect the following exercises.
Compensation of negative taxable bases (BIn): losses generated in an exercise that can be compensated, for fiscal purposes, in the following exercises.
Accrued benefit Tax (ID): Amount determined by application of accounting principles and standards and considered as an exercise expense.
Tax on Benefits payable (IP): Amount determined by the application of the tax rules and that does not constitute, in any case, a deductible expense.
Economic Result (RE): Balance of the Account «Profit and Loss» before imputing the corresponding accrued tax.
Adjusted ledger Result (RCa): obtained by the following algorithm
RCa = RE +/-Dp
Gross Tax (IB): obtained by the following algorithm
IB = Ti x RCa
Being You the tax rate applicable in each case.
It follows From this that the tax accrued shall be:
Id = IB – Bonuses – Deductions
Taking into account that the amount of the bonuses and deductions will be those corresponding to each financial year, without considering the limits of application contained in the tax rules.
Once The basic concepts are presented, we will comment on the main accounts that collect the tax effect, according to the last modifications of the General Accounting Plan (CMP) introduced by the Accounting and Auditing Institute (ICAC).
470. Public Treasury, debtor for various concepts.
4709. Public Treasury, tax return debtor.
473. Public Finances, withholdings and payments on account.
4730. Public Finances, withholdings.
4731. Public Finances, payments on account of Corporate Tax.
474. Anticipated benefit Tax and loss compensation.
4740. Anticipated benefit Tax.
4745. Credit for loss to compensate for the financial year….
4746. Credit for deductions pending for the year….
475. Public Treasury, creditor for tax concepts.
4752. Public Treasury, Corporate Tax creditor.
4709. Public Treasury, tax return debtor.
In this account the amount of the negative differential fee will be collected. That Is to say, the excess difference between the sum of the retentions supported and the payments on account made on the liquid quota of the current exercise.
Public Finances, withholdings.
This account shall contain the amount of the withholdings sustained during the current period on the yields of the capital and, where appropriate, on the leases of real estate.
4731. Public Treasury, payments on account of the tax on companies.
This account will collect the amount of the account revenues made during the current period in application of the current fiscal regulations.
4740. Tax on anticipated benefits.
This account will collect excess tax on benefits payable (tax) with respect to the accrued benefit tax (accountant).
It Is charged when positive temporal differences have occurred in the current exercise.
It Is paid when in the current period negative temporal differences of previous exercises appear.
4745. Credit for loss to compensate for the exercise….
This account shall include the amount of the reduction of the tax on benefits payable in the following years resulting from the existence of negative taxable bases pending compensation.
It Is charged when in the current exercise there has been a negative taxable base.
It Is paid when it is compensated in the following exercises.
4746. Credit for deductions pending for the year….
In This account, which is not defined in the P.G.C., the amount of the deductions pending for application will be collected, exceeding the limits imposed by the tax regulations.
It Is charged when in the current exercise there has been a deduction not applicable for exceeding its amount of the limits set by the current fiscal regulations.
It Is paid when it is imputed or applied in the following exercises.
4752. Public Treasury, corporate tax creditor.
This account will collect the amount of the tax on benefits payable (tax) determined from the economic result through the application of tax criteria.
4791. Deferred benefit Tax.
This account will collect the excess of the accrued benefit Tax (accountant) with respect to the tax on benefits payable (tax).
It Is paid when negative temporal differences have occurred in the current exercise.
It Is charged when in the current exercise positive temporal differences of previous exercises appear.
630. Income Tax.
This account will collect the amount of the accrued benefit tax (accountant) determined by applying economic and accounting criteria.
633. Negative Adjustments in the imposition of benefits.
This account will collect the decrease, known during the exercise, of the tax on anticipated profits or the taxable credit for losses to be compensated. Likewise, the increase, also known in the exercise, of the tax on deferred profits will be collected in this account.
638. Positive Adjustments in the imposition of benefits.
This account shall be collected the increase, known during the period, of the tax on anticipated profits or of the taxable credit for losses to be compensated. Likewise, it will be collected in this account the decrease, also known in the exercise, of the tax on deferred profits.
Despite belonging to Group 6. Purchases and expenses., this account will present credit balance and, therefore, will be regularized paying that balance to the account 129. Profit and Loss.
Differences between accounting and tax regulations
Of all the comments so far it follows that there are many differences between the principles that govern the accounting field and those that govern the tax field. Here are the main differences.
Expenses modified by the tax standard.
Of property, plant and equipment (article 11.1).
Accelerated. Freedom of amortization (article 11.2).
Transfer Contracts with option of purchase or renewal (Article 11.3).
of goodwill (article 11.4).
Of Transfer Rights (article 11.4).
Of trademarks and other property, plant and equipment (article 11.5).
For Depreciation of Editorial Funds (Article 12).
For Insolvency (article 12.2).
For depreciation of shares not listed in an organized market
By Depreciation of fixed income securities that listed in an organized market (Article 12.4).
For Risks and expenses (article 13.1).
For responsibilities (article 13.2).
For Extraordinary Repairs (item 13.2).
For expenses arising from sales, guarantees and revisions (article 13.2).
Appropriations to the reversion Fund (article 13.2).
Technical provisions of insurance companies (article 13.2).
Technical provisions of Reciprocal Guarantee Societies (article 13.2).
Endowments to pension funds (article 13.3).
Non-deductible accounting Expenses.
2.1. All societies.
Equity compensation (article 14.1).
Corporate Tax (article 14.1).
Fines and penalties (article 14.1).
Game Losses (item 14.1).
Donations and Liberalities (article 14.1).
Endowments to internal funds (article 14.1).
Expenses in tax havens (article 14.1).
Subcapitalization (article 20).
2.2. Exempt Entities.
Expenditure of their own activities (article 135.2).
Application of rents (article 135.2).
Excess value attributed to work benefits (article 135.2).
Tax-deductible Items that are not accounting expenditure.
Endowment to the Social Charity of the Savings Banks (article 22).
Accounting Income that is not fiscally.
4.1. Exempt Entities.
Income obtained (article 9).
4.2. Reciprocal Guarantee Companies.
Subsidies (article 13.2).
Income derived from subsidies received (article 13.2).
4.3. Cooperative Societies.
Transmission of elements affecting the education and Promotion Fund.
Rents obtained by the attribution of goods and rights of the Agrarian Chambers.
4.4. Other societies.
Extraordinary Income derived from inflationary processes (article 15.1).
Income from the transfer of investments affects the Social Benefit of Savings Banks (article 22.2).
Income obtained by Companies and Venture Capital Funds (article 69).
Income obtained by Regional Industrial Development Societies (article 70).
Certain dividends and shares in benefits of transparent companies (article 75.5).
Some dividends and shares in profits of companies in the regime of international fiscal transparency (article 121.8).
Reinvested extraordinary Income in small enterprises (article 127).
Income obtained by partially exempt entities (article 132).
Aid to the Community Fisheries and Agrarian Policy (eleventh additional Provision).
Some income obtained by the Foundations and other entities received by Law 30/1994.
Tax Revenues that are not accountable.
Recovery of value of the patrimonial elements acquired to a linked entity that in its day made a deductible value correction when determining its taxable base (article 19.6).
Loss suffered in the transmission of patrimonial elements that are acquired again within six months of the date of transmission (article 19.6).
Imputation of taxable bases from transparent companies (article 75.2).
Imputing of rents in companies subject to the regime of international fiscal transparency (article 121.1).
Different valuation criteria.
Accounting revaluations that are not integrated in the taxable base (article 15.1).
Tax Valuation at the normal market price (articles 15.2, 17.1 and 17.2).
Related Operations (article 16).
Lift to the full of liquid remunerations (article 17.3).
Temporal imputation Differences.
Accounting of income and expenses in a different exercise to obtain the faithful image of the company’s patrimony and of its operations (article 19.2).
Revenues obtained from operations with deferred price (article 19.4).
Reinvested Extraordinary Income (article 21).