It was also regulated by a transitional provision when the reversion should occur: basically and simplifying, when the value of equity of the investee at year-end exceeded the value of equity at the beginning.

Problematic.

With RDL 3/2016, a new reversal was introduced with effect for the years beginning on or after January 1, 2016, which in essence constitutes a minimum annual reversal amount:

" 3. In any case, the reversal of impairment losses on the amounts representing the equity or equity of entities that have been tax deductible in the taxable income tax base in tax periods previously initiated At 1 January 2013, shall be composed of at least equal parts in the tax base for each of the first five tax periods beginning on or after 1 January 2016.

In the event of a reversal of a higher amount by application of the provisions of paragraphs 1 or 2 of this provision, the remaining balance will be integrated in equal parts between the remaining tax periods.

However, in the case of transfer of the securities representing the share in the capital or in the own funds of entities during the said tax periods, they will be integrated in the taxable base of the tax period in which it is produced the amounts to be reversed, With the limit of the positive income derived from that transmission ".

To this new regulation, in order to assess all its possible effects, we must combine it with the limits to offset negative tax bases (also modified and limited with RDL 3/2016, but only for companies with a net turnover in the twelve months Prior to the date of the start of the tax period of at least 20 million euros), which are generally limited in 2016:

• To 60% of the tax base prior to the application of the capitalization reserve and to the compensation of negative tax bases
• With a minimum compensation of up to one million euros.

The sum of both rules can therefore produce, with effects already for the fiscal years beginning in 2016, that negative tax bases still to be applied, motivated not only but substantially due to portfolio impairments, can not now fully compensate The positive tax base resulting from the new, retroactive and mandatory minimum reversal precisely from said portfolio.

Solutions.

Faced with this situation, and the proximity of the end of the exercise, the alternatives to the problems exposed may be the following:

1. Analyze the possible application to each case of transitory provision sixteenth section 8 of the IS Act.

The objective would be to avoid the 60% limit on the application of negative tax bases (ie to be able to apply all the necessary amount of negative tax bases without limitation) if the requirements of the article are met. As a result, the reversal of the portfolio would be fully offset against the negative tax bases still to be applied, and the above problem would no longer exist.

But for this to be applicable, it is necessary that the composition of the deductible losses derived from the deterioration of the portfolio in relation to the total deductible expenses is 90% due to the provision for the impairment of the portfolio.

Said Transitory Provision sixteenth reads as follows:

"1. The reversal of impairment losses on the amounts representing the equity or equity of entities that have been fiscally deductible from the corporate income tax base in accordance with Article 12 (3) Consolidated Text of the Corporate Tax Law, approved by Royal Legislative Decree 4/2004, of March 5, in tax periods beginning before January 1, 2013, regardless of its accounting allocation in the income statement and Shall be included in the taxable income for the period in which the value of own funds at the end of the year exceeds that of the beginning of the period, in proportion to its participation, taking into account the contributions or returns of contributions made in it, with the Limit of such excess. For these purposes, it will be understood that the positive difference between the value of own funds at the close and at the beginning of the year, in the terms established in this paragraph, corresponds, firstly, to impairment losses that have been tax deductible.

Likewise, these impairment losses will be included in the taxable income for the amount of dividends or interests in profits received from the investees, unless such distribution does not have the condition of accounting income.

The provisions of this section shall not be applicable in respect of losses due to impairment of the holding that are determined by the distribution of dividends or participations in profits and that did not give rise to the application of the internal double taxation deduction or That such losses have not been tax deductible in the area of ​​international tax relief.

2. The reversal of impairment losses on the securities representing the equity or equity of entities listed on a regulated market to which Article 12 (3) of the recast text has not been applied The Corporate Tax Law, in tax periods beginning before January 1, 2013, will be included in the taxable income tax base for the tax period in which the recovery of its value in the accounting field occurs.

3. In any case, the reversal of impairment losses on the amounts representing the equity or equity of entities that have been tax deductible in the taxable income tax base in tax periods initiated prior to 1 January 2013, shall be composed of at least equal parts in the tax base for each of the first five tax periods beginning on or after 1 January 2016.

In the event of a reversal of a higher amount by application of the provisions of paragraphs 1 or 2 of this provision, the remaining balance will be integrated in equal parts between the remaining tax periods.

However, in the case of transfer of the securities representing the share in the capital or in the own funds of entities during the said tax periods, they will be integrated in the taxable base of the tax period in which the one is produced the amounts to be reversed, With the limit of the positive income derived from that transmission.

4. In the event that a permanent establishment had obtained negative net income that had been included in the taxable income of the entity in tax periods beginning before January 1, 2013, the exemption provided for in article 22 of this Law or The deduction referred to in article 31 of this Law shall only apply to positive income obtained after the moment they exceed the amount of said negative income.

5. In the case of transfer of a permanent establishment in tax periods beginning on or after 1 January 2016, the taxable amount of the transferring entity resident in Spanish territory shall be increased by the amount of the excess of the net negative income generated By the permanent establishment in tax periods beginning before January 1, 2013 on net positive income generated by the permanent establishment in tax periods beginning as of this date, with the limit of the positive income derived from the transmission of the same.

6. In the case of a temporary union of companies which, having received the exemption regime provided for in article 50 of the Consolidated Text of the Corporate Income Tax Law, in accordance with current wording for tax periods beginning before January 1, 2015 , Would have obtained negative net income abroad that would have been integrated into the taxable income of the member entities in tax periods beginning before January 1, 2013, when in successive fiscal years the temporary union obtains positive income, the member companies will integrate in Its taxable income, with positive character, the previously imputed negative income, with the limit of the amount of said positive income.

The same rule will apply in the case of entities that participate in works, services or supplies abroad by way of collaborative formulas similar to the temporary unions of companies that had received the mentioned exemption regime.

7. In the case of restructuring operations subject to the special tax regime established in Chapter VII of Title VII of this Law:

• A) If the partner loses the status of resident in Spanish territory, the difference referred to in paragraphs 4 of article 80 and paragraph 3 of article 81 of this Law, will be corrected, if applicable, in the amount of losses For impairment of value that have been tax deductible in tax periods beginning before January 1, 2013.
• B) For the purposes of the provisions of section 2 of article 84 of this Law, the negative tax bases corresponding to losses suffered by the transferring entity that have motivated the depreciation of the acquiring entity's interest in capital Of the transferor, or the depreciation of the participation of another entity in the latter when they all form part of a group of companies referred to in article 42 of the Commercial Code, regardless of their residence and the obligation to prepare accounts When any of said depreciation occurred in tax periods beginning before January 1, 2013.

8. The limit established in the first paragraph of section 1 of article 26 of this Law shall not apply to the amount of income corresponding to the reversal of impairment losses that are included in the taxable amount in accordance with the provisions of The preceding paragraphs of this transitional provision provided that the impairment losses deducted during the tax period in which the negative tax bases intended to be offset were generated represented at least 90 per cent of the deductible expenses for that period. In the event that the entity has negative tax bases generated in several periods beginning before January 1, 2013, this requirement may be fulfilled by adding the aggregate of all deductible expenses of said tax periods. "

Sixteenth transitory provision, with effect for tax periods beginning on or after January 1, 2016, by section two of number one of article 3 of RD-law 3/2016, of December 2, Adopt measures in the tax field aimed at consolidating public finances and other urgent social measures ("BOE" 3 December). Effective: 3 December 2016 Effects / Application: 1 January 2016

It is therefore a simple solution, in application of current legislation, but requires compliance with the prescribed 90% percentage.

2. Proceed to the transfer of the participation on which the endowment was made to an entity linked to the seller, or to a third party with subsequent repurchase.

This option, however, raises reasonable doubts about its effectiveness, since in case of transfer of shares to an entity of the group (an operation that used to be done in due time to consolidate the deductible impairment loss in view of the imminence of possible reversals), in In case of a reversal of value, Article 11.6 of the Tax Law already obliges and continues to require that:

"The reversal of an impairment or correction of value that has been fiscally deductible, shall be charged to the taxable base of the tax period in which the reversal occurred, either in the entity that made the correction or in another entity related to it. The same rule shall apply in the event of losses arising from the transfer of assets that have been newly acquired ".

That is to say: in case of reversion of the value, and in spite of having been transmitted, the adjustment must also be made.

As the article does not distinguish as to the reason for the reversal (if this occurs as a result of the recovery of value of the deteriorated entity or as a result of the new compulsory minimum reversion - which was not regulated when article 11 was drafted, 6-) depending on the interpretation subsequently proposed by the General Tax Directorate, this adjustment should be mandatory in both cases. In fact, this is stated literally in the transcribed article, which does not discriminate on what the cause of the reversal, and consequently, would seem to cover whether it occurs as a result of a recovery of the value of the company or if it occurs as a consequence Of the new obligation to revert the minimum of 20%.

It should be emphasized that the possible positive adjustment would not take place in the selling company, but would occur in the purchasing company, which would entail a transfer of the adjustment between related companies from the seller to the buyer.

3. Proceed to transmit to a third party not linked with the selling company, the participation on which the endowment was made (without subsequent repurchase).

In this case, the following consequences would occur:

• Reversal for the period elapsed during 2016: since if the sale is made at the end of the current year, it will practically mean that it must have reversed almost all 20% of the deteriorated value that was deductible at the time.
• With a sale for a minimum amount (close to zero, if this is its market value), obtaining a negative tax result (for the difference between zero and the tax value of the alienated company, which in principle will coincide with the reversal of the Previous point).

In short, the sum of both adjustments would result in a fiscal result of zero.

This operation will only take effect if it is done in 2016 for two reasons:

1. Because if carried out in 2017, the positive reversal that must be made in 2016 will have had its harmful effects in the 2016 financial year.
2. Because if it is carried out in 2017, RDL 3/2016 has also amended article 21.6 of the Corporate Tax Law with effect for 2017 by the following worded:

"6. Negative income derived from the transfer of the participation in an entity, in respect of which one of the following circumstances will be included in the tax base:

A) that the requirements established in section 3 of this article are fulfilled ".

And section 3, in short, requires a minimum holding of 5% (or an acquisition cost of € 20 million) and has continued uninterruptedly during the preceding year.

This means that in 2017, the loss resulting from the transmission (made in 2016, as we have seen, allows to compensate the adjustment of the reversion and leave the taxable base to zero), will not be deductible, so the reversion would not have Counterpart and fully taxable.

If a possible transmission operation could not be concluded in 2016 for any imponderable, it would always be better to proceed with a modification of the fiscal year to maintain the regime of the deductibility of the transmissions with losses, that will be in force as soon as the exercise has begun during Any day of the year 2016.

Finally, it should be noted that under article 21.8 of the Corporation Tax Law, also amended by RDL 3/2016, in the event of the company's extinction, the negative income generated would be deductible even in 2017.

4. Waiver of the negative tax bases of previous years.

It would be possible to assess the waiver of the negative tax bases corresponding to previous years in what concerns the adjustments or the accounting provisions for portfolio impairment, with the aim of preventing the reversal of the same.

In the event of an inspection, and after years of jurisprudential controversy, Article 26.5 of the Corporate Tax Law was introduced as follows:

"5. The right of the Administration to initiate the procedure of verification of the negative tax bases compensated or pending compensation will be prescribed to the 10 years from the day after the end of the deadline established to present the declaration or self-assessment corresponding to the tax period In which the right to compensation was generated.

At the end of this period, the taxpayer must prove the negative tax bases whose compensation is sought through the presentation of the liquidation or self-assessment and accounting, with proof of deposit during the said term in the Mercantile Registry.

​ Article 26, paragraph 5, with effect for tax periods beginning on or after January 1, 2015, by section two of the sixth final provision of Law 34/2015, of September 21, partial amendment of the Law 58/2003, of 17 of December, General Tax ("BOE" 22 of September) .Vigencia: 12 October 2015 Effects / Application: 1 January 2015

That is to say: in the case of inspection, and in relation to tax bases not applied, three points must be distinguished:

to. The maximum of 10 years from the tax filing period (in fiscal years coinciding with the calendar year from 2005 onwards):

The rule regulates the evidence that the taxpayer must provide in order to validly exercise their right to compensation. Such tests are self-assessment or, where applicable, liquidation and accounting, expressly requiring that the books of accounts have been deposited in the Mercantile Registry within a period of 10 years.

B. Between 2006 and 2011 inclusive:

The Administration has the authority to verify and investigate said negative tax base, and this, even if it has prescribed its right to liquidate the period in which that base was generated.

C. From the year 2012 to the year 2015:

It is part of the normal inspection process of non-prescribed exercises.

Therefore, up to and including fiscal year 2011, the taxpayer's lack of retention of evidence should entail the elimination of negative tax bases (voluntarily by means of a complementary one in fiscal year 2012, or derived from an inspection check), without this entailing Sanction by affecting only prescribed exercises.

On the other hand, and for the financial year 2012, a complete inspection is still possible, and any changes affecting that year could be corrected by the inspection, based on its own judgment and assessment, during the verification period, The statute of limitation, would be extended four more years from the presentation of the alleged supplementary statement.

For the post-2012 financial years, the problem would no longer exist, as portfolio impairments were not deductible, and consequently, it is impossible for them to be affected by the new minimum reversion.

Conclusion.

Based on the foregoing, the safest operation based on current knowledge and interpretations derived from the amendment introduced by RDL 3/2016 that seeks to eliminate the effects of the mandatory minimum reversal of impairment losses per portfolio that were deductible would consist of a Sale of said shares to third parties not related to the company that at the time made the deductible endowment.