9.9.2.1. Provisions to the reserve for investments in the Balearic Islands

For the tax periods that begin between January 1, 2023 and December 31, 2028, taxpayers who carry out economic activities and determine their net income through the direct estimation regime will have the right to a deduction in the full amount for the net operating income that is allocated to the Reserve for Investments in the Balearic Islands as long as these come from economic activities carried out through establishments located in the Balearic Islands.

Amount

The deduction will be calculated by applying the average aggregate tax rate (state and regional) to the annual contributions to the reserve that come from the net operating income for the year.

Limit

The deduction for contributions to the Investment Reserve may not exceed 80% of the part of the full tax quota that proportionally corresponds to the amount of net operating income that comes from establishments located in the Balearic Islands.

Requirements and conditions

The taxpayer must determine the net performance of its economic activities using the direct estimation method.
The income must come from economic activities carried out through establishments located in the Balearic Islands.
The reserve for investments must appear in the balance sheets with absolute separation and appropriate title and will be unavailable as long as the assets in which it materialized must remain in the company.
They must keep the accounting in the manner required by the Commercial Code and its implementing regulations from the year in which the profits that are intended to provide the reserve for investments have been obtained until the year in which the assets subject to the transaction must remain in operation. materialization of the investment.

While the investment maintenance period is not met, they will record in the report the information related to the provisions made, the reserve pending materialization, the amount and date of the investments, the amount and date of the investments anticipated to the provision, any other tax benefit obtained on the occasion of each investment and the reliable declaration of the amount of subsidies or other support measures, of the de minimis aid received during the two previous fiscal years and, when the reserve is materialized, which does not Other state aid has been applied whose concurrence involves exceeding the limits established in the community regulations that, in each case, are applicable.

Taxpayers who are not required to keep annual accounts will keep a record book of investment assets, in which the above information must appear. In investments in securities, as long as the maintenance period is not met, the amount and date of the investments made that entail the materialization of the reserve provided by the subscribing entity for its shares or participations must be recorded in the report, as well as the exercises during which they must remain in operation.
The amounts allocated to said Reserve must be materialized within a maximum period of three years from the date of accrual of the tax corresponding to the year in which it was allocated, in one of the following investments:
1. The acquisition of assets of tangible or intangible assets, of assets that contribute to the improvement and protection of the environment in the territory of the Balearic Islands, in the terms that are determined by regulation, as well as the research and development expenses derived from research, development and technological innovation activities referred to in article 35.1 and 2 of Law 27/2014, of November 27, on Corporate Tax.
  
  When it comes to land, built or not, it must be affected by certain activities.
  
  In the case of intangible assets, the reserve may not materialize in trademarks or non-patented knowledge, under the terms determined by regulation.
  
  In the case of elements of passenger transport by sea, they must be dedicated exclusively to public services in the scope of functions of general interest that correspond to the public needs of the Balearic Islands.
  
  In the case of road passenger transport vehicles, it will be necessary for the company to have its tax domicile in the territory of the Balearic Islands.
2. The 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.
3. The subscription of shares or participations in the capital issued by companies as a result of their constitution or capital increase that carry out their activity in the archipelago, provided that certain requirements are met.
The assets in which the investment is materialized must be located or received in the Balearic archipelago, used therein, affected and necessary for the development of the taxpayer's economic activities, except in the case of those that contribute to the improvement and environmental protection in the Balearic territory.
It will be understood that the amount of the materialization will reach the acquisition price or production cost of the assets, excluding interest, indirect state taxes and their surcharges, without being higher than their market value.
Materialization will be deemed to have occurred, even in cases of acquisition through financial leasing, at the moment in which the assets come into operation.
When the reserve has materialized in the investments referred to in letter A of number 5 and letter C, they must remain in operation for at least five years, without being transferred, leased or assigned to third parties for their use. When its useful life is less than said period, this requirement will not be considered non-compliance when another asset element is acquired to replace it at its book value, within a period of six months from its deregistration from the balance sheet that meets the requirements. required for the application of the reduction provided for in this section and that remains in operation for the time necessary to complete said period.

It cannot be understood that this new acquisition represents the materialization of the amounts destined for the reserve for investments in the Balearic Islands, except for the amount thereof that exceeds the net book value of the asset element that is replaced and that was considered materialization of the regulated reserve in this section. In the case of the acquisition of land, the term will be ten years.

In cases of loss of the asset element, it must be replaced in the terms provided in the previous paragraph.
Taxpayers who engage in the economic activity of leasing or assigning property elements to third parties for their use may enjoy the investment reserve regime, provided that there is no direct or indirect connection with the lessees or assignees of said assets or These are financial leasing operations.
The provision of the reserve for investments prior to the maintenance period of the investment or for investments other than those planned, as well as non-compliance with any other of the established requirements, will give rise to the loss of the deductions made, and the taxpayer will be obliged to add to the state liquid quota and the regional or complementary liquid quota accrued in the year in which the requirements were not met, the amounts improperly deducted, plus the corresponding late payment interest.

Incompatibility

The deduction for Reserve for Investments is incompatible for the same assets and expenses, with the deduction for investments of article 68.2 of the Personal Income Tax Law.

It is also incompatible for the same goods and expenses with any tax benefit or measure of a different nature that has the status of state aid under European Union Law, if said accumulation exceeds the limits established in the community order that, in each case. , are applicable.

Anticipated investments of future endowments

Taxpayers may make advance investments of future contributions to the investment reserve, provided that they meet the remaining requirements set forth therein and the aforementioned provisions are made with a charge to profits obtained in the tax period, or in the three subsequent ones.

The aforementioned materialization and its financing system will be communicated together with the personal income tax return for the tax period in which the anticipated investments are made.