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Form 100. Personal Income Tax Declaration 2019

9.8.4.2. Deductions for fiscal year 2019

The investment modalities regulated in articles 35 to 43 of the Corporate Tax Law will be included, with application of the increased deduction percentages, in accordance with the provisions of article 94 of Law 20/1991, of June 7 , modifying the fiscal aspects of the Economic and Fiscal Regime of the Canary Islands.

Thus, the rates applicable to investments made will be 80 percent higher than those of the general regime, with a minimum differential of 20 percentage points.

  • For expenses and investments in research and development activities:

    • R&D expenses: 45% deduction

    • R&D expenses higher than the average of the previous two years: 75.6% deduction

    • Expenses with the right to additional deduction: 37% deduction

    • Investments in elements affected by R&D: 28% deduction

  • For expenses on technological innovation activities: 45% deduction

  • For investments in film productions, audiovisual series and live performing arts and musical shows (Art.36 of the LIS):

    • Spanish productions of feature films and audiovisual series deduction of 45 or 40%

    • Expenses for the execution of a foreign production, expenses incurred in Spanish territory: 40% deduction

    • Production and exhibition expenses for live performing arts and musical shows: 40% deduction
  • For job creation for workers with disabilities: 11,700 or 15,600 euros per person/year increase.
  • Investments in acquisition of fixed assets: 25% deduction

Common standards

Joint maximum limit of deductions

In accordance with the provisions of article 94 of Law 20/1991, of June 7, modifying the fiscal aspects of the Economic and Fiscal Regime of the Canary Islands (according to the wording given by DA 4 of Law 19/1994, of June 6), the maximum deduction limit will always be 80 percent higher than that set for the general regime, with a minimum differential of 35 percentage points.

The limit of investments covered by the general regime is applied to deductions for investment in West African territories, for propaganda and advertising expenses.

The limit will be 50% individual (70% joint) in the case of investments in the acquisition of fixed assets.

For research and development and technological innovation activities, investments in film productions, audiovisual series and live performances of performing and musical arts and job creation for workers with disabilities, the limit will be jointly 60 percent of the quota that results from reducing the sum of the full state and regional contributions in the total amount of deductions for investment in habitual residence, of the deduction for investment in new or recently created companies and for actions for the protection and dissemination of Spanish Historical Heritage and World Heritage .

However, this limit is raised to 90 percent when the amounts of deductions for scientific research and technological innovation activities that correspond to expenses and investments made in the tax period itself exceed the 10 percent of that same fee. On the islands of La Palma, La Gomera and El Hierro these limits are raised to 70 and 100 % when the Community regulations on state aid allow it and they are investments contemplated in Law 2/2016.

These limits, which apply independently of those applicable to investments under the general regime, are calculated and applied by the program.

Amounts not deducted

The amounts corresponding to the tax period not deducted may be applied in the settlements of the tax periods that end in the immediate and subsequent 15 years.

However, the amounts corresponding to deductions for scientific research and technological innovation activities may be applied in the settlements of tax periods that end in the following 18 years.

The calculation of the deadlines for the application of the deductions provided for in this chapter may be deferred until the first year in which, within the limitation period, positive results are produced, in the following cases:

  1. In newly created entities.

  2. In entities that clean up losses from previous years through the effective contribution of new resources, without the application or capitalization of reserves being considered as such.

Investment maintenance

The assets subject to these deductions must remain in operation for five years, or three if they are movable assets, or during their useful life if shorter.

Together with the fee corresponding to the tax period in which non-compliance with this requirement is manifested, the deducted amount will be entered, in addition to late payment interest.

Completion

The calculation of deductions for business investment is not carried out by the program.

For the purposes of completion, a data capture window will open for each deduction in which you must provide the amount of the deduction, and where appropriate, a lower amount if you do not wish to apply the entire amount in the 2019 declaration.

The program will apply the amount provided as long as it does not exceed the established maximum limits. If the indicated amount exceeds the applicable limit, the latter will be applied.