BINs

Extemporaneous offsetting of NOLs

 

Authors: Andreu Bové (Partner of Bové Montero y Asociados) and Jorge Bonilla (Tax department of Bové Montero y Asociados)

 

The Spanish Supreme Court confirms through two judgments that the offsetting of Net Operating Losses (NOLs) is a right and not a tax option.

With these rulings, the High Court puts an end to the Tax Administration’s criteria of refusing to offset NOLs when the taxpayer does not file the Corporate Income Tax on time (i.e. late filing).

These judgments state that offsetting NOLs is not a tax option but an autonomous right that complies with the principle of economic capacity, available to any taxpayers, who can exercise it or not, without preventing its exercise through a late filing.

In short, offsetting NOLs can be done even when a Corporate Income tax self-assessment is filed late.