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Form 100. 2019 Personal Income Tax return

9.7. Deductions for income obtained in Ceuta or Melilla

Deduction for income obtained in Ceuta or Melilla (article 68,4 Act)

The deduction for income obtained in Ceuta or Melilla may be applied in the following cases:

  • Taxpayers resident in Ceuta or Melilla

    1. Taxpayers resident in Ceuta or Melilla for a term of less than three years

      Taxpayers who have their habitual residence in Ceuta or Melilla can apply this deduction for incomes obtained in Ceuta and Melilla.

      The deduction consists of 60% of the sum of the full state and autonomous or complementary payments that proportionally correspond to the incomes calculated for the determination of the net tax bases that have been obtained in these territories. 100

    2. Taxpayers resident in Ceuta or Melilla for a period not less than three years

      This deduction may also be applied by taxpayers who have lived in Ceuta or Melilla for a period not less than three years, in tax periods beginning after the end of that period for incomes obtained outside these cities, when the following requirement is met:

      • At least one third of the taxpayer's net assets, determined in accordance with the regulations governing Wealth Tax, are located in these cities.

    Limit

    The maximum amount of income obtained outside these territories, which may benefit from the deduction, will be the net amount of the income and capital gains and losses obtained in these cities.

  • Non-resident taxpayers in Ceuta or Melilla

    Taxpayers who do not have their usual residence in Ceuta or Melilla may apply this deduction for incomes obtained in Ceuta and Melilla.

    The deduction consists of 60% of the sum of the full state and autonomous or complementary payments that proportionally correspond to the incomes calculated for determining the positive net tax bases that have been obtained in Ceuta or Melilla. 100

    Under no circumstances may this deduction be applied to the following incomes:

    • To those from Collective Investment Institutions, except when all of their assets are invested in Ceuta or Melilla.

    • To earned income

    • To capital gains derived from movable assets

    • To income from deposits or accounts in all types of financial institutions

    Attention :Under no circumstances may the amount of this deduction exceed 60% of the total tax payment, and the program will break down the corresponding state and autonomous community portion. 100

Income obtained in Ceuta or Melilla  

The following incomes obtained in Ceuta or Melilla for these purposes shall be considered:

  1. Earned income, when derived from work of any kind carried out in these territories, as well as those derived from unemployment benefits and of the social security systems referred to in Article 17.2.a) of the Tax Act (Article 58,1 of the Act).

  2. The returns derived from the ownership of real estate located in Ceuta or Melilla or from real rights that fall on them.

  3. Those resulting from the financial activities actually carried out in Ceuta or Melilla.

    Transactions actually carried out in Ceuta or Melilla are those that close a business cycle in these territories that determines economic results or that involve the provision of a professional service in these territories.

    These circumstances will not be estimated to occur in the case of isolated operations of extraction, manufacture, purchase, transport, entry and exit of genres or effects on them and, in general, when operations do not determine income on their own (Article 58,2 of the Act).

    In the case of fishing and maritime activities, the rules established in article 33 of the revised text of the Corporation Tax Act shall apply.

  4. Capital gains derived from real estate assets based in Ceuta or Melilla.

  5. Capital gains derived from movable assets located in Ceuta or Melilla.

  6. The return on movable capital from obligations or loans, when the capital is invested in these territories and there they generate the corresponding income.

  7. The return on movable capital from the lease of movable assets, businesses or mines, when the purpose of the lease is located and is effectively used in Ceuta and Melilla (article 58,4 of the Act).

  8. Income from companies that operate effectively and materially in Ceuta or Melilla and with their registered office and exclusive corporate purpose in these territories.

  9. Income from deposits or accounts in all types of financial institutions located in Ceuta or Melilla.

Completion

The income obtained in Ceuta or Melilla will be recorded in a data capture window, stating the following information:

  • Income included in the general tax base

    The amount of the income obtained in Ceuta or Melilla included in the general tax base will be entered in this box.

    The following returns are included as earned in Ceuta and Melilla:

    • Net (reduced) income from work, capital (which should not be included in the savings tax base) and economic activities. 

    • The returns derived from the ownership of real estate located in Ceuta and Melilla.

    • The net balance of capital gains and losses attributable to 2019 that do not derive from the transfer of capital elements. 

    Negative items originating in Ceuta and Melilla 

    If the net balance of capital gains and losses that do not result from a transfer is negative, only the amount that has been included in the taxable base for the financial year will be taken into account, without including, where applicable, the outstanding part in subsequent years. If this negative balance does not correspond entirely to income obtained in Ceuta or Melilla, the outstanding portion will be distributed proportionally.

    In addition, to calculate the income obtained in Ceuta and Melilla included in the general tax base, the negative items from previous years originating in Ceuta and Melilla that have been offset in the general tax base must be subtracted.

    To calculate this deduction, the programme does not consider the case of compensation of negative net tax bases from previous years

  • Incomes included in the savings tax base

    The amount of the income obtained in Ceuta or Melilla included in the savings tax base will be entered in this box.

    Included in the savings tax base:

    • The net positive balance of capital gains and losses attributable to 2019 resulting from the transfer of capital elements.

    • The positive net balance of the capital gains included in the savings tax base.

    Negative items originating in Ceuta and Melilla

    To calculate the incomes obtained in Ceuta and Melilla included in the savings tax base, the negative items from previous years originating in Ceuta and Melilla that have been offset in the current financial year must be subtracted. If this negative balance does not correspond entirely to income obtained in Ceuta or Melilla, the outstanding portion will be distributed proportionally.

  • Joint income tax return

    In order for the program to calculate the deduction in this type of taxation, it must include the sum of the income obtained in Ceuta and Melilla by all the members of the family unit.

    In general, the amount of income obtained in Ceuta and Melilla with the right to deduction will be the sum of those that give rise to this same right in the individual tax returns of the declarant and the spouse.

    However, in some cases, the option for the type of tax may cause variations in the amount of deductible expenses with a maximum limit, and of the reductions applicable to the net income from the work.