In 2020 and 2021, small companies can deduct unpaid debts only three months after the payment is due.

Impairment of receivables. Companies that have suffered an unpaid debt during the year 2020 (subject to certain exceptions, such as when the debt is guaranteed or owed by public bodies, for example) must recognise the corresponding impairment of receivables when closing the accounts for the financial year. In general, such impairment will be deductible for tax purposes if any of the following conditions have arisen at the end of the reporting period:

– That the debtor has been declared bankrupt or has been prosecuted for asset stripping.

– The company has initiated a judicial or arbitration claim against the debtor.

– Or at least six months have elapsed since the maturity of the transaction.

Reduced dimension. However, small companies (in general, those with a turnover of less than 10 million euros per year) should bear in mind the following:

– In addition to deducting the above expense, an impairment expense equal to 1% of the customer balance at 31 December may be recognised and deducted. In calculating this impairment, they should not take into account the balances receivable that are individually impaired and deductible.

– Also, exceptionally, in 2020 and 2021, they only have to wait three months after the maturity date (instead of six) to be able to deduct the impairment for unpaid debts.

Also in Personal Income Tax. The reduction of the waiting period from six to three months to deduct unpaid debts is applicable both for corporate income tax and personal income tax (i.e. in the case of entrepreneurs who carry out an economic activity). (i.e. in the case of entrepreneurs carrying on an economic activity). In the same way, individuals who are lessors of properties that suffer non-payments can also take advantage of this rule when calculating the net yield of the real estate capital to declare in their IRPF of 2020 and 2021.