9.5.1.Deduction for income obtained in Ceuta or Melilla

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

Taxpayers residing in Ceuta or Melilla
1. Taxpayers resident in Ceuta or Melilla for a period of less than three years
  
  Taxpayers who have their habitual residence in Ceuta or Melilla can apply this deduction for income obtained in Ceuta and Melilla.
  
  The deduction consists of 60% of the part of the sum of the full state and regional or complementary quotas that proportionally corresponds to the income computed for the determination of the taxable bases that would have been obtained in said territories.
2. Taxpayers resident in Ceuta or Melilla for a period of no less than three years
  
  This deduction may also be applied by taxpayers who have resided in Ceuta or Melilla for a period of no less than three years, in tax periods beginning after the end of that period for income obtained outside said cities, provided that at least one third of the taxpayer's net assets, determined in accordance with the regulations governing the Wealth Tax, are located in said cities.
The maximum amount of income obtained outside of these territories that can benefit from the deduction will be the net amount of the returns and capital gains and losses obtained in these cities.
Taxpayers not resident in Ceuta or Melilla

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

The deduction consists of 60% of the part of the sum of the full state and regional or complementary contributions that proportionally corresponds to the income computed for the determination of the positive taxable bases that would have been obtained in Ceuta or Melilla.

In no case may this deduction be applied to the following incomes:
- Those from Collective Investment Institutions, except when all of their assets are invested in Ceuta or Melilla.
- To the income from work
- To capital gains from movable property
- To the income from deposits or accounts in all types of financial institutions
In no case may the amount of this deduction exceed 60% of the total tax rate, and the program will break down the corresponding state and regional portion.

Income obtained in Ceuta or Melilla

For these purposes, the following will be considered income obtained in Ceuta or Melilla:

Income from work, when derived from work of any kind performed in said territories, as well as income derived from unemployment benefits and social security systems referred to in article 17.2.a) of the Tax Law (art. 58.1 Rgl.).
Income from ownership of real estate located in Ceuta or Melilla or property rights that affect them.
Those arising from the exercise of economic activities actually carried out in Ceuta or Melilla.

Operations actually carried out in Ceuta or Melilla are understood to be those that close a commercial cycle in these territories that determine economic results or involve the provision of a professional service in said territories.

Such circumstances will not be deemed to occur when it concerns isolated operations of extraction, manufacturing, purchase, transportation, entry and exit of goods or effects therein and, in general, when the operations do not determine income by themselves (art. 58.2 Rgl.).

In the case of fishing and maritime activities, the rules established in article 33 of the consolidated text of the Corporate Income Tax Law will apply.
Capital gains arising from real estate located in Ceuta or Melilla.
Capital gains arising from movable property located in Ceuta or Melilla.
Income from movable capital arising from bonds or loans, when the capital is invested in said territories and generates the corresponding income there.
Income from movable capital arising from the leasing of movable property, businesses or mines, when the object of the lease is located and effectively used in Ceuta and Melilla (art. 58.4 Rgl.).
Income from companies that operate effectively and materially in Ceuta or Melilla and with domicile and exclusive corporate purpose in said territories.
Income from deposits or accounts in all types of financial institutions located in Ceuta or Melilla.