The TEAC has put an end to uncertainty about how to treat corporate tax deductions that were left unapplied in previous years

The TEAC has put an end to uncertainty about how to treat deductions that were left unapplied in previous years. If your company forgot to include any deduction in Corporation Tax, it may still have a solution according to the new TEAC criteria. Not all forgotten deductions are lost, but it depends on the year.

Sometimes, due to sheer workload or lack of coordination, a company leaves out of its Corporation Tax (IS) a deduction to which it was entitled. More happens than it seems: deductions for R&D, technological innovation, training, employment of people with disabilities... incentives that are there, but that are lost because they have not been reflected in time.

Until recently, this had a simple solution. If you realized the mistake later, you could Include the forgotten deduction in the return for a subsequent financial year, without major complications, provided that the maximum years had not passed to apply it (10, 15 or 18, depending on the type of deduction). But in June 2022, the Treasury changed the rules of the game.

Change of DGT criteria

On June 24, 2022, the Directorate General of Taxation (DGT) published two inquiries that altered the approach that had been applied for years. From that date, it was established that if a company forgot to apply a deduction, it could only correct it by rectifying the original return. And here came the problem: if that exercise was already prescribed (that is, more than four years had passed), the deduction was lost forever.

Many companies that had followed the above criteria found themselves in a hurry: the Treasury began to review tax returns, remove deductions and claim fees with interest. The taxpayers' response was clear: “they are sanctioning us for doing what was previously considered right.”

The TEAC brings order: resolution of September 2025

El Central Economic Administrative Court (TEAC) has been pronounced recently (Resolution No. 00/01267/2025, of September 17, 2025) and has opted for a balanced solution. Recognizes that the change in criteria cannot be applied retroactively and that companies that acted in accordance with the previous criterion cannot be penalized for it.

In short:

• Deductions for financial years with self-assessments filed before June 24, 2022. They can be applied following the old criterion: it is allowed to include the deduction in a subsequent return, within the general period for its use (10, 15 or 18 years).
• Deductions generated in years with a tax return filed as of June 24, 2022. In these cases, only the original self-assessment can be rectified. If the exercise has already been prescribed, the deduction cannot be recovered.

Example

Let's imagine the case of Tecnover, S.L., an engineering company whose fiscal year coincides with the calendar year.

In 2021, the company invested 82,400 euros in the development of their own software aimed at optimizing energy control processes in their facilities. Under Corporation Tax regulations, I had the right to apply a 12% deduction for R&D activities, That is to say, 9,888 euros about the full fee.

The problem is that, due to an accounting oversight - the technical report arrived after the fiscal close - The deduction was not included in the 2021 IS return, submitted on July 25, 2022.

Years later, when preparing the 2024 IS, the company detects the error and plans to include that deduction in the new return.

• With the above criteria (in force until June 24, 2022), I could have done it without further ado: it was enough to include the deduction in the 2024 return, within the 18-year period provided for R&D deductions.
• But since the 2021 IS self-assessment presented after June 24, 2022, it can no longer be directly applied in a subsequent financial year.

In order to recover this incentive, Tecnover, S.L. you should submit a rectification of IS 2021 before July 25, 2026. If you miss that date, the exercise will expire and the deduction will be permanently lost.

This example reflects how easy it is to lose a relevant tax benefit due to a simple oversight of dates or because of not knowing the change in criteria. In a company with tight margins, 9,888 euros less tax can make the difference between closing the year with benefit or in balance. That is why, now more than ever, it is appropriate Review all deductions generated in recent years: R&D, innovation, job creation, environmental investments... If the IS of those years was presented before June 2022, the old route can still be used. But if it came later, the clock is already ticking.

What we can't forget...

Before giving up unapplied deductions, you should carefully review your previous years.

• Take an inventory of the deductions generated and outstanding. Review your R&D reports, subsidized contracts or investments eligible for incentives. There may be forgotten deductions that may still apply.
• Check the dates. If the self-assessment was submitted before June 24, 2022, you can use the old criteria. If it was later, you can only do so by rectifying.
• Don't wait for me to prescribe. The four years go by quickly. If you need to submit a rectification, do so as soon as possible.
• Document the reason and justification for the deduction well.
  The Treasury especially reviews those related to R&D or innovation. It is important to keep technical reports, certifications and proof of expenditure.
• Consult before applying. Each case has nuances, especially in terms of deductions linked to irregular exercises or closures outside the calendar year. An advisor can help you choose the right path and avoid formal errors.

The TEAC has restored some coherence to the system. Companies that acted in good faith, following previous Treasury guidelines, will not lose their deductions. But from now on, the rules change: if you forget to apply an incentive, it can only be recovered by rectifying the original declaration, and within the legal deadlines.

It's time to review your tax history. Sometimes a forgotten deduction can mean thousands of euros in savings... if you're still in time to recover it.

You can contact this professional office for any questions or clarifications you may have in this regard.

A cordial greeting,

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EUROGRUP TAX & LEGAL, SL
Via Augusta, 223, 1st floor - 08021 Barcelona
Paseo de la Castellana, 130, 9th floor - 28046 Madrid

932 008 894
www.euro-grup.com/en/
eurogrup@euro-grup.com

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