Post by account_disabled on Mar 7, 2024 4:54:30 GMT
In canceling the debt, entity B writes off the liability for 1,100 and the property for 900, recording income for the difference of 200 in the 2023 income statement. Registration in the partner In accordance with article 40 of that Resolution, the legal entity partner must apply to the fair value of what is received the same proportion that represents the reduction of own funds with respect to the net assets of the entity before the capital reduction , the amount of which will be computed as a recovery of part of the investment in the participation, so it will be derecognized and the difference up to the fair value of what was received will be computed as financial income in the profit and loss account.
Tax treatment of capital reduction operations with refund of contributions In accordance with article 10 of Law of November 27, on Corporate Tax (LIS) , the accounting Asia Mobile Number List criteria for the recognition of income and expenses are assumed . Therefore, the LIS assumes the accounting criteria on the year in which the effects of the capital reduction operation must be recognized . Tax effect on society In accordance with article 17 LIS, in this company an income is generated by the difference between the market value of the element delivered to the partner and its tax value .
Income that would coincide with the income in the profit and loss account recognized in the company, provided that the book value of such element coincides with its tax value. Therefore, in the event of this coincidence, no adjustment would have to be made to the accounting results of this company to determine its tax base. In the same previous example , entity B would generate an income of 200 (1,100-900) that would be integrated into the tax base for the year 2023. If the income statement for that year also recorded an income of the same amount of 200, there would be no make any tax adjustment to the accounting result to determine the tax base for that same year. Otherwise, the positive adjustment to be made to the accounting result would be 200.
As indicated, if the operation was recorded respecting the accounting criteria, no adjustment would have to be made when an income of 200 was recorded in the profit and loss account. Tax effect on the partner Likewise, according to article 17 LIS, the legal entity partner computes the market value of the element received in the capital reduction as the lower tax value of the participation in the investee company and only the excess would be integrated into the tax base, without prejudice to that the exemption regime of article 21 LIS can be applied to it. Therefore, in the value of the participation, no income would be generated for tax purposes.
Tax treatment of capital reduction operations with refund of contributions In accordance with article 10 of Law of November 27, on Corporate Tax (LIS) , the accounting Asia Mobile Number List criteria for the recognition of income and expenses are assumed . Therefore, the LIS assumes the accounting criteria on the year in which the effects of the capital reduction operation must be recognized . Tax effect on society In accordance with article 17 LIS, in this company an income is generated by the difference between the market value of the element delivered to the partner and its tax value .
Income that would coincide with the income in the profit and loss account recognized in the company, provided that the book value of such element coincides with its tax value. Therefore, in the event of this coincidence, no adjustment would have to be made to the accounting results of this company to determine its tax base. In the same previous example , entity B would generate an income of 200 (1,100-900) that would be integrated into the tax base for the year 2023. If the income statement for that year also recorded an income of the same amount of 200, there would be no make any tax adjustment to the accounting result to determine the tax base for that same year. Otherwise, the positive adjustment to be made to the accounting result would be 200.
As indicated, if the operation was recorded respecting the accounting criteria, no adjustment would have to be made when an income of 200 was recorded in the profit and loss account. Tax effect on the partner Likewise, according to article 17 LIS, the legal entity partner computes the market value of the element received in the capital reduction as the lower tax value of the participation in the investee company and only the excess would be integrated into the tax base, without prejudice to that the exemption regime of article 21 LIS can be applied to it. Therefore, in the value of the participation, no income would be generated for tax purposes.