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Form 100. 2019 Personal Income Tax return

9.8.4.2. Deductions for 2019

The investment modalities regulated in Articles 35 to 43 of the Corporation Tax Act will be included, with the application of the increased percentages deduction amounts, in accordance with the provisions of article 94 of Law 20/1991 of 7 June, amending the tax and economic aspects of the Canary Islands Tax and Economic Regime.

Thus, the applicable rates on investments made will be higher by 80% to those of the general regime, with a minimum spread of 100 percentage points. 20

  • For expenses and investments in research and development activities:

    • R & D expenses: Deduction of 45%

    • R & D expenses above the average for the previous two years: Deduction of 75.6%

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

    • Investments in R & D elements: Deduction of 28%

  • For expenditure on technological innovation activities: Deduction of 45%

  • For investments in film productions, audiovisual series and live performing arts and music shows (Art.36 of the Spanish Corporation Tax Act):

    • Spanish productions of cinematographic and audiovisual series, deduction of 45 or 40%

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

    • Production and display costs of live performing arts and music shows: Deduction of 40%
  • For creating jobs for disabled workers: 11,700 Or 15,600 euros per person/year of increase.
  • Investments in acquisition of fixed assets: Deduction of 25%

Common standards

Maximum limit for all deductions

In accordance with the provisions of article 94 of Law 20/1991 of 7 June on the modification of tax aspects of the Canary Islands Economic and Tax Regime (according to the wording given by the of Act 19/1994, of 6 June), the maximum deduction limit will always be higher at 80%, which is set for the general regime, with a minimum differential of 100 percentage points. 35

The limit of investments under the general regime is applied to deductions for investment in territories in West Africa for advertising and propaganda expenses.

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

For research and development and technological innovation, investments in film productions, audiovisual series and live shows of performing arts and music and creation of employment for workers with disabilities, the limit will be 60% of the resulting quota of reducing the sum of the full state and autonomous payments in the total amount of deductions for investment in primary residence, of the deduction for investment in new companies or recent creation and actions to protect and disseminate Spanish Historical Heritage and World Heritage.

However, this limit is raised to 90% when the amounts of deductions for scientific research and technological innovation activities corresponding to expenses and investments made in the tax period exceed 100% of the same tax liability. 10 100 In 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 this and are investments provided for in Act 2/2016.

These limits, which are applied regardless of the corresponding limits for investments under the general regime, are calculated and applied by the program.

Amounts not deducted

Amounts corresponding to the tax period not deducted may be applied in the settlements of the tax periods ending in the 15 immediate and subsequent years.

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

The calculation of the deadlines for applying the deductions provided for in this Chapter may be deferred until the first financial year in which positive results occur within the limitation period, in the following cases:

  1. In newly created entities.

  2. In companies that are healing losses from previous years by effectively contributing new resources, without considering the application or capitalisation of reserves as such.

Investment maintenance

The capital elements used for these deductions must remain in operation for five years, or three years if they are movable assets, or during their useful life if they are lower.

In conjunction with the tax payment corresponding to the tax period in which the non-compliance with this requirement is stated, the amount deducted will be paid, 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 completing the calculation, a data capture window will open in each deduction, in which the amount of the deduction must be provided, and if the amount of the deduction is not applied in the 2019 tax return.

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