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What it is

Bill to restore a tax credit for small firms that reinvest profits

Admitted step 2 of 7 · Unfinished

It is a members’ bill. Introduced by parliamentary groups, the Senate, regional governments or citizens. It was introduced on 29 June 2018. Introduced by: Grupo Parlamentario Mixto.

Official title: Private member's bill to amend the Corporate Tax Act to stimulate the reinvestment of profits by small and medium-sized enterprises.

Source: Congreso de los Diputados, file 122/000251· updated 11 Nov

Automatic summary, not yet reviewed

  1. The proposal would bring back the tax credit for reinvested profits that the 2014 Corporate Tax reform removed, as an alternative to the current leveling reserve for taxable bases.
  2. The bill would create a 15 percent credit on the tax bill for profits reinvested in new tangible fixed assets (except land, natural assets and buildings) and in industrial property and software applications.
  3. Companies using the credit would have to set up an investment reserve equal to the credit base, keep the assets for at least 5 years, and disclose the details in the notes to their annual accounts. Missing any requirement means losing the credit.
  4. The law would take effect on January 1 of the year after its approval, so it would not affect budgets already in force.

Who it affects

  • Small and medium-sized companies meeting the requirements of Article 101 of the Corporate Tax Law: They could credit 15 percent of profits they reinvest in new equipment, industrial property or software.
  • Companies taxed under the fiscal consolidation regime: The investment and the reserve can be made by any entity in the tax group.
  • Companies using the leveling reserve for taxable bases or incentives such as free depreciation: They cannot apply this credit, because it is incompatible with them.

Words worth knowing

Cuota íntegra
The tax amount obtained by applying the tax rate to profits, before applying any credits.
Inmovilizado material
Tangible fixed assets: long-lasting physical goods such as machinery, furniture or vehicles.
Consolidación fiscal
A regime where several companies in the same group are taxed together, as if they were one.
Reserva indisponible
Part of the profits a company must set aside and cannot distribute or use freely.
Libertad de amortización
A tax benefit that lets a company deduct the cost of an investment all at once instead of spreading it over years.

It summarizes the text as it was introduced. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries

Where it stands

How far did it get?

It took 2 of 7 steps. It reached Admitted, and today it is unfinished.

  1. Introduced29 June 2018Someone registers the text in the Congreso.
  2. Admitted10 July 2018The Bureau of the Congreso accepts it and, for a members’ bill, the plenary decides whether to consider it.
  3. Amendmentsnot reachedGroups propose changes.
  4. Committeenot reachedA committee goes through the text in detail.
  5. Plenarynot reachedAll 350 deputies vote.
  6. Senatenot reachedThe Senate can pass it, amend it or veto it.
  7. BOEnot reachedIt is published in the Official State Gazette (BOE) and comes into force.
See the 6 official steps on a timeline
Jun 2018Sept 2018Dec 201811. 29 June 2018: Presentación22. 10 July 2018: Boletín Oficial de las Cortes Generales Publicación desde 10/07/2018 hasta 13/07/201833. 10 July 2018: Calificación44. 13 July 2018: Gobierno Contestación desde 13/07/2018 hasta 06/10/201855. 6 October 2018: Pleno Toma en consideración desde 06/10/2018 hasta 05/03/201966. 5 March 2019: Concluido - (Caducado) desde 05/03/2019 hasta 27/03/2019

Was there a plenary vote?

We have no plenary vote linked to this law in the Congreso’s data.

What happens next

What happens now?

The legislature ended before it finished. To go on, someone would have to introduce it again in the new Cortes.

It has not been presented again yet.

Sources

Where does all this come from?

  • The data comes from the open files of the Congreso, the Senate and the BOE, unaltered.
  • Each deputy’s province is the one of their seat on the day of the vote.
  • We only say “passed” or “rejected” when the majority needed is certain; otherwise we say which side had more votes.