BackIn its judgment of January 31, 2024, the Superior Court of Justice of Madrid examines two main aspects. First, the validity of a loan granted by the appellant entity to another entity, as well as the consideration of such loan as uncollectible, which would allow its deduction as a loss in the impairment of the Corporate Income Tax for the year 2016. Second, whether there was an error by the appellant entity in recording the loss from the uncollectible loan in box 315 of Form 200 of its Corporate Income Tax self-assessment, when it argues that, since there is no relationship between the lending and borrowing entities, such loss should have been included in box 316, which would imply a direct deduction without adjustments to the taxable base.
The court determines that the appellant entity has demonstrated the existence of the loan and its subsequent uncollectibility, thus meeting the legal requirements to consider a loss due to asset impairment. However, with regard to the second issue, the Court has not been able to confirm that the inclusion in box 315 of Form 200 of the appellant entity’s self-assessment, related to Corporate Income Tax, was an error, given that the entities are not related.
The mere assertion of an expert report unsupported by documentation is not considered sufficient evidence. Therefore, the appellant entity’s request to include the loss in box 316 of its self-assessment, intended for impairment losses of other unrelated entities, cannot be accepted.
The deduction of the impairment loss on the uncollectible loan is confirmed, while the argument regarding the error in the tax return is rejected, maintaining the rest of the resolutions of the TEAR and the settlement agreement.
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