BackThe Supreme Court has endorsed the possibility for entities to deduct, within the scope of Corporate Tax, amounts that have been incorrectly recorded in different fiscal periods, even when the period in which the records were made has expired. In this regard, the high court contradicts the criterion held by the tax administration, which argues that this practice is not permissible once the deadline for the corresponding period has passed.
This conclusion has been reached by the Contentious-Administrative Chamber in a judgment issued on March 22, which dismisses the appeal filed by the State Advocacy, acting on behalf of the Administration, against a previous ruling of the Superior Court of Justice of Andalusia (TSJA), issued in June 2022, which validated the settlement of Corporate Tax made by a company in an incorrect period.
The origin of the controversy lies in the declaration made by the company Masarvix regarding the fiscal year 2016, during which it accounted for and deducted as expenses in Corporate Tax five invoices totaling €10,187.40, actually corresponding to the fiscal year 2009. The tax administration considers this taxation erroneous, a position supported by the Regional Tax and Economic Court (TEAR) of Andalusia, which argues that an expense accrued in a previous fiscal year than the one recorded can be deducted in the latter, “provided it does not result in lower taxation” and considering whether the fiscal year in which the expense was accrued has expired or not.
The company argues that, in any case, there has been no decrease in revenue for the public treasury since, if the invoices had been recorded in the correct fiscal year, the taxable base declared in 2009 would have been negative by €7,342.88 instead of positive by €2,844.52. Furthermore, it argues that the taxable base for 2016, after offsets, would be zero.
The Supreme Court has studied this issue for a period of nine months, since in June 2023 it admitted the appeal of the Administration considering that there was a “casual interest” for the formation of jurisprudence. After examining the accounting regulations, the judges of the Contentious-Administrative Chamber point out that “the fact that it should have been recorded in the fiscal year in which it accrued does not prevent its subsequent registration from being admitted,” as has happened in the case of Masarvix.
Likewise, the court clarifies that what expires is “the right of the Administration to settle or the right of the taxpayer to rectify a self-assessment,” two situations that, as the judgment establishes, have not occurred in the present controversy.
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