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Form 100. Personal Income Tax Return 2021

Completion

The deadline for materializing the reserve for investments in the Canary Islands is three years, except in the case of provisions with profits obtained in tax periods beginning in 2016, which is extended by one more year, pursuant to the provisions of article 27.4 of Law 19/1994, of July 6, amending the Economic and Tax Regime of the Canary Islands, as amended by Royal Decree-Law 15/2014, of December 19, amending the Economic and Tax Regime of the Canary Islands.

Furthermore, as a result of the health crisis caused by COVID-19, the deadline for realizing the investment was suspended from March 14 to May 30, 2020.

This period must be counted from the date on which the reserve is allocated (accounted for), which in the case of natural persons may be:

  • At the close of the accounting period on December 31 of each year.

  • In the year following the year in which the profit is obtained.

In accordance with the information provided for completion, taxpayers covered by the Canary Islands Investment Reserve regime will record, through a data capture window, the amount of the provisions corresponding to each of the years in the following boxes:

  • In boxes [1681] [0733], [0735], [0738], [0742] and [0746] the amount of the provisions corresponding to income obtained in the Canary Islands from 2016 to 2021 that have been allocated to the Reserve for Investments in the Canary Islands (RIC) will be recorded.

  • Casillas [1682], [0734], [0789], [0792], [0794] and [0802] will indicate the year of the allocation, which may be at the end of the fiscal year in which the net operating income was obtained or in the following fiscal year.

  • Casillas [1684], [0777], [0736], [0739], [0743], [0747] will indicate the amount of the materializations made against the previously declared allocation in the investments provided for in letters A, B, B bis and D 1 of article 27.4 of Law 19/1994.

  • Casillas [1685,] [0778], 0737], [0740], [0744], [0748] will indicate the amount of the materializations made against the previously declared allocation in the investments provided for in letters C and D 2 to 6 of article 27.4 of Law 19/1994.

  • Casillas [1683], [0829], [0790], [0741], [0745] and [0749]

    The amount of each of the previously declared provisions that is pending materialization as of December 31 will be indicated.

    As a result of the health crisis caused by COVID-19, the deadline for realizing the investment was suspended from March 14 to May 30, 2020, and was extended by 78 days.

    Regarding this extension:

    1. Box [1683] will be completed only if the reserve created with profits from 2016 was accounted for in 2017.
    2. Box [0829] will be completed only if the reserve created with profits from 2017 was accounted for in 2018.
    3. Box [0790] must be completed if the reserve created with 2018 profits was accounted for in 2018.

You must indicate the anticipated investments in the data capture window, distinguishing:

  • Box [0750].

    The amount of investments made in 2021 as advance investment of future provisions in those provided for in article 27.4 will be indicated. A, B, B bis and D 1, Law 19/1994.

  • Box [0750].

    The amount of investments made in 2021 as advance investment of future provisions in those provided for in article 27.4 will be indicated. C and D 2 to 6, Law 19/1994.

Investments in which the provisions made can be materialized 

The allocations to the reserve may be materialized in any of the following investments when the requirements of article 27.4 of Law 19/1994 of the Canary Islands Tax Regime are met:

  1. Initial investments consisting of the acquisition of new tangible or intangible fixed assets as a result of:

    • The creation or expansion of an establishment.

    • The diversification of an establishment's activity for the production of new products.

    • The substantial transformation in the production process of an establishment.

    • Investments in land, built or not, provided that they have not previously benefited from this regime and are affected:

      1. For the promotion of protected housing and intended for leasing by the developer company.

      2. For the development of industrial activities included in divisions 1 to 4 of the first section of the rates of the Tax on Economic Activities.

      3. To commercial areas and tourist activities under the terms established in article 27.4 of Law 19/1994 of the Economic and Fiscal Regime of the Canary Islands.

  2. Creation of jobs directly related to the investments provided for in letter A, which occurs within a period of six months from the date of entry into operation of said investment and meets certain requirements for increasing staff. The creation of jobs carried out in the tax period that cannot be considered as an initial investment for not meeting any of the requirements established in letter B of article 27, with a limit of 50% of the allocations to the Reserve made by the taxpayer in the tax period.

  3. Acquisition of tangible or intangible fixed assets that cannot be considered as an initial investment due to not meeting any of the conditions established in letter A above, investment in assets that contribute to the improvement and protection of the environment in the Canary Islands, as well as those research and development expenses that are determined by regulation.

  4. Subscription of:

    1. Shares or interests in the capital issued by companies as a result of their incorporation or capital increase that carry out their activity in the archipelago, provided that the requirements established in article 27.4 of Law 19/1994 are met.

    2. Shares or interests in the capital issued by entities of the Canary Islands Special Zone as a result of their incorporation or capital increase, provided that the requirements and conditions established in number 1 above and those provided for in Chapter I of Title V of Law 19/1994 are met.

      Additionally, the following conditions must be met:

      The amount of the issue or capital increase will be greater than 750,000 euros.

      At least 10% of the issue or capital increase will be subscribed by a person or entity that does not materialize amounts allocated to the reserve for investments in the Canary Islands and will be disbursed immediately after the granting of the deed of incorporation or capital increase.

    3. Any financial instrument issued by financial institutions provided that the funds raised for the purpose of materializing the Reserve are intended to finance private projects in the Canary Islands, whose investments are suitable in accordance with the regulations in this article, provided that the issues are supervised by the Government of the Canary Islands, and have a binding report from the State Tax Administration Agency.

    4. Public debt securities of the Autonomous Community of the Canary Islands, of the Canary Islands Local Corporations or of their public companies or autonomous bodies, provided that they are intended to finance investments in infrastructure and equipment or in the improvement and protection of the environment in the Canary Islands, with a limit of fifty percent of the provisions made in each financial year.

    5. Securities issued by public bodies that carry out the construction or operation of infrastructure or equipment of public interest for public administrations in the Canary Islands, when the financing obtained from said issue is exclusively intended for such construction or operation, with a limit of fifty percent of the provisions made in each financial year.

    6. Securities issued by entities that carry out the construction or operation of infrastructure or equipment of public interest for public administrations in the Canary Islands, when the financing obtained from said issue is exclusively intended for such construction or operation, with a limit of fifty percent of the provisions made in each financial year and under the terms provided for by regulation.