If your company has a turnover of over 10 million euros be aware of the important decision to be taken before October 20th
In this article we explains the inconstitutionality of payments on account of corporate tax return of 2016,2017 and 2018.
The Constitutional Court has recently issued a Sentence declaring the unconstitutionality of Royal Decree Law 2/2016, of September 30, regarding the regulation of the calculation of payments on account of Corporate Tax return corresponding to the years 2016 and 2017, and to the first payment made in 2018.
The Royal Decree Law (RDL) measures declared unconstitutional affected entrepreneurs with a turnover of over 10 million euros and forced them to make a minimum installment payment based on their accounting result without considering, for example, tax adjustments for exempt income, which meant, in in many cases, a substantial advance of the Corporation Tax fees that were not returned by the Tax Administration until more than a year later.
The reason for the unconstitutionality of the RDL is based on the fact that it goes beyond the limits set forth in article 86.1 of the Spanish Constitution, violating the rights, duties and freedoms of citizens, in terms of the obligation to contribute to the support of the public spending.
What are the effects of this sentence? The Constitutional Court says that situations that have acquired firmness or that have not been appealed within the deadline stipulated will not be reviewed. It must be added that, the payments on account corresponding to the tax periods as of July 2018 will not be affected by the declared unconstitutionality.
Finally, an important question arises regarding the possible return of default interests corresponding to those payments on account that, being determined in accordance with this null RDL, would have been higher than those due if the current legislation had not been altered. In this case, we understand that it is feasible that taxpayers can request the interest derived from the differential paid in the payments on account affected by the judgment if they have not prescribed.
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Related services:
- Tax advisory
- Impuesto sobre Corporate tax and Special Regimes y regímenes especiales
- Tax Inspections and Tax Procedure
- Tax of Family Owned Companies
