Retroactive application of R&D tax deductions: new TEAC ruling
Change of DGT approach: situation before the new TEAC ruling
In the field of R&D tax credits under Corporate Income Tax (CIT), the retroactive application of R&D tax deductions has been the subject of intense legal debate in recent years due to a change of position by the Directorate-General for Taxation (DGT), which directly affected companies with unused tax benefits pending application.
Until consultations V1510-22 and V1511-22, both dated 24 June 2022, the DGT allowed taxpayers to claim unused deductions from prior years in their current return, without the need to file amended returns, provided they remained within the 18-year statutory period for application.
However, following these consultations, the DGT reversed its position and required the rectification of the original self-assessments in which the R&D expenses were generated, thereby limiting retroactive application to the last four years (statute of limitations).
This shift prompted an appeal before the Supreme Court (TS) to resolve two key questions regarding the retroactive application of R&D tax credits:
- Whether expenses incurred in prior years, but not included in the self-assessment, could still be used as the basis for a deduction.
Whether it was mandatory to rectify the original self-assessments in order to claim the deduction.
In its judgment 4355/2023 of 24 October 2023, the Supreme Court confirmed that deductions from previous years may be applied without rectification, even if the returns are time-barred, as long as they remain within the 18-year period.
However, this ruling applied only to the specific claimant and did not establish general doctrine, which meant the DGT and the AEAT (Spanish Tax Agency) continued to uphold their restrictive interpretation.
The practical impact of this gap: uncertainty and loss of deductions
During this period, many taxpayers were affected by legal uncertainty, particularly those who had not applied past deductions and later could not amend their returns due to prescription, thereby losing legitimate R&D tax benefits.
This situation was perceived as a violation of the principle of legitimate expectation, since taxpayers had acted in line with a criterion that had been valid for years.
New TEAC ruling: definitive unification of the criterion
The Central Economic-Administrative Court (TEAC), in its ruling of 17 July 2025, has now unified the criterion and clarified the situation once and for all.
It recognised that the 2022 consultations explicitly changed the previous criterion, thereby breaking the legitimate expectation created by earlier binding rulings (V802-2011, V0297-2012 and V2400-2014).
Two different scenarios are established:
A) Self-assessments filed after 24 June 2022
Taxpayers must rectify their returns if they failed to include the deduction.They can no longer invoke legitimate expectation, as the new criterion was already in force at the time of filing.
They can no longer invoke legitimate expectation, as the new criterion was already in force at the time of filing.
B) Self-assessments filed before 24 June 2022
In these cases, legitimate expectation is protected.
Taxpayers cannot now be required to have included the deductions in the original year.
They may still apply them, as long as they remain within the statutory period.
The same approach is confirmed in the TEAC resolution of 17 July 2025, RG 1267-2025, issued in an extraordinary appeal for unification of criteria.
Practical application of the TEAC ruling on retroactive R&D tax credits
The TEAC has finally resolved a key legal uncertainty. From now on, any company with R&D tax credits generated in 2020 or earlier, and which neither applied nor rectified them, may still apply them in its CIT return for 2025, provided that:
The deductions remain within the 18-year statutory period.
The company holds adequate documentary and technical evidence.
It is strongly advisable to obtain ENAC-accredited certifications, which substantiate the reality, amount and qualification of the R&D project, thereby reducing the risk of the Tax Authority challenging the deduction.
These certifications may still be obtained now, provided the company retains the necessary documentation (projects, expenses, contracts, etc.)
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