Improvements in the capitalization reserve
From 2024, the capitalisation allowance reduction has been increased from 10 to 15%. In addition, the increase in equity on which the reduction is calculated will only have to be maintained for three years.
Highest percentage of reduction
Capitalisation reserve until 2023, 10%.
If your company has benefited from the “capitalisation reserve” incentive in 2023 or in any previous year, it will have been able to reduce the taxable base of its Corporate Tax (IS) by up to 10% of the amount by which it has increased its funds:
- This increase is the positive difference between the equity at the end of the year – without including its results – and the equity at the beginning, without the profits of the previous year.
- In this calculation, you should not take into account as equity – among other items – neither the contributions of the partners, nor the capital increases or equity by offsetting credits, nor the legal reserves.
Capitalisation reserve from 2024, 15%
Well, with effect for the years starting from January 1, 2024, it has been approved that said reduction percentage be 15%.
So, from now on it will be even more interesting for your company to declare a higher accounting result, so that the increase in your equity is higher and, consequently, you can enjoy a greater reduction in your IS.
If you have an SME: minimum depreciation.
If your company is small (generally it will be if it invoices less than ten million euros per year), try to record the minimum possible depreciation in order to declare a higher accounting result.
This will not make you pay more tax!
Do not forget that, when depreciating the assets you have acquired new, your company – being small – can deduct each year, as tax depreciation, up to double the depreciation resulting from applying twice the maximum coefficient of tables.
This amount is deductible regardless of the depreciation recorded.
Shorter maintenance period for the capitalization reserve
Until 2023, five years
On the other hand, in order to consolidate this incentive, until now:
- Your company had to maintain the increase in equity on which it had calculated the reduction for the five years following the end of the year in which the incentive was applied, unless there were accounting losses (in which case, even if equity decreased, there would be no breach).
- You also had to create an unavailable reserve equal to the reduction applied and keep it on the balance sheet for the five years indicated.
From 2024, three years
Well, from 2024 these maintenance periods are reduced to just three years. This mitigates one of the main drawbacks of this incentive: the limitation of distributing dividends or reserves during the maintenance period.
From now on, your company will have to wait less time to make these distributions.
Capitalisation reserve from previous years
Also, please note that this reduction in the maintenance period is also applicable to reductions computed in the 2023 financial year and in previous years and whose maintenance period has not yet expired at the beginning of 2024.
Thus, for example:
- If your company applied the capitalisation reduction in the 2021 IS, you will only have to maintain the increase in equity and the capitalisation reserve accounted for until the end of the 2024 financial year (instead of until 2026, which was when the five-year period expired).
- If you applied the reduction in the 2020 IS or in previous years, you will now be able to use the capitalisation reserve and distribute dividends or reserves without losing the reductions applied in those years.
