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Form 200. Corporate Income Tax Declaration 2018

4.2.80 Codes 00403 and 00404 reserve for investments in the Canary Islands (Law 19/1994)

Article 27 of Law 19/1994, of July 6, amending the Economic and Tax Regime of the Canary Islands, regulates the tax benefit consisting of the reduction in the taxable base of the Corporate Tax of the amounts that, in relation to their establishments located in the Canary Islands, the entities (except those excluded according to the aforementioned article and the Twelfth Additional Provision of Law 19/1994) subject to said tax allocate from their profits to the investment reserve in accordance with the provisions of article 27 itself. This reduction will not apply to the portion of profits obtained from activities related to shipbuilding, synthetic fibres, the automobile industry, the steel industry and the coal industry, and therefore the reduction cannot be applied to that portion of the profit.

Likewise, when applying this reduction, the special conditions provided for in the first to sixth additional provisions of Royal Decree-Law 12/2006, of December 29, amending the Economic and Fiscal Regime of the Canary Islands, must be taken into account.

The provisions of the sole transitional provision of Royal Decree-Law 15/2014 must also be taken into account, which regulates the transitional regime applicable to the provisions of the reserve for investments in the Canary Islands (hereinafter, RIC) made before January 1, 2015, to the advance investments of the RIC made before January 1, 2015 and to the consideration as profits not suitable for providing the RIC to the income that has benefited from the deduction regime of article 42 of RDLeg . 4/2004.

Finally, it must be taken into account that the application of the benefit of the investment reserve will be incompatible, for the same assets and expenses, with the deductions to encourage the performance of certain activities regulated in Chapter IV of Title VI of the LIS and with the deduction for investments regulated in Article 94 of Law 19/1994.

Using these codes, taxpayers entitled to this tax benefit will apply the aforementioned reduction to the taxable base of the Corporate Tax or, where appropriate, will incorporate into the taxable base any reductions applied that are found to be undue.

In key [00404] they will record, as a decrease in the accounting result, the amount of the allocations to the aforementioned reserve in accordance with the limit and other conditions established in the aforementioned article 27 of Law 19/1994. This amount corresponds in all cases to the provisions made against profits from tax periods beginning within the year 2017, whether they are allocated to non-anticipated investments or to anticipated investments if the latter have been made within the year 2017.

The amounts allocated at the time to the reserve for investments in the Canary Islands that led to the reduction of the tax base and that, due to having been used from the reserve prior to the investment maintenance period or for investments other than those admitted, as well as due to non-compliance with any other of the requirements established in the regulatory regulations, must be included in the tax base of the year being declared due to the occurrence of any of the aforementioned circumstances, will be recorded in code [00403], as an increase to the accounting result.

In the case of cooperative societies, the amount reflected in key [00403] or [00404] must be transferred to key [C10] on page 22 of form 200, with a positive or negative sign, respectively, and if both keys are contained, the difference between them will be transferred, indicating a positive or negative sign, depending on whether key [00403] is greater or less (in absolute terms) than key [00404].

In any case, entities covered by the special regime of the reserve for investments in the Canary Islands in any tax period starting between 2016 and 2018 inclusive, must complete the information requested in the corresponding section on page 22 of form 200, as indicated below:

  • In key [00089] the amounts by which the taxable base for the 2014 financial year was reduced by the Reserve for investments in the Canary Islands (accounted for in the following financial year against the profits for the 2014 financial year) will be recorded.

  • In key [00094], of those amounts by which the tax base for the 2014 financial year was reduced (accounted for in the following financial year), the amount of those that have materialized, in the tax period subject to declaration, in any of the investments provided for in letters A, B and D 1 of article 27.4 of Law 19/1994 must be recorded.

  • In key [00095], for those amounts by which the tax base for the 2014 fiscal year was reduced (accounted for in the following fiscal year), the amount of those that have materialized, in the tax period subject to declaration, in any of the investments provided for in letters C and D 2 to 6, of article 27.4 of Law 19/1994 must be recorded.

  • In key [00097] the amounts by which the taxable base for the 2015 financial year was reduced by the Reserve for Investments in the Canary Islands (accounted for in the following financial year against the profits for the 2015 financial year) will be recorded.

  • In key [00098], for those amounts by which the tax base corresponding to the 2015 fiscal year was reduced (accounted for in the following fiscal year), the amount in which they have materialized, in the tax period subject to declaration, in any of the investments provided for in letters A, B and D 1 of article 27.4 of Law 19/1994 must be recorded.

  • In key [00047], for those amounts by which the tax base corresponding to the 2015 fiscal year was reduced (accounted for in the following fiscal year), the amount of those that have materialized, in the tax period subject to declaration, in any of the investments provided for in letters C and D 2 to 6 of article 27 of Law 19/1994 must be recorded.

  • In key [00048], of the amounts that reduced the tax base corresponding to the 2015 fiscal year (accounted for in the following fiscal year), the amount of those that have not yet materialized in any of the investments referred to in letters A, B, C and D of article 27.4 of Law 19/1994 must be recorded.

  • In key [00524], the amounts by which the taxable base for the 2016 financial year was reduced by the Canary Islands Investment Reserve (accounted for in the following financial year against the profits for the 2016 financial year) will be recorded.

  • In key [00525], of those amounts by which the tax base corresponding to the 2016 fiscal year was reduced (accounted for in the following fiscal year), the amount of those that have materialized, in the tax period subject to declaration, in any of the investments provided for in letters A, B, B bis and D 1 of article 27.4 of Law 19/1994 must be recorded.

  • In key [00526], of those amounts by which the tax base corresponding to the 2016 fiscal year was reduced (accounted for in the following fiscal year), the amount of those that have materialized, in the tax period subject to declaration, in any of the investments provided for in letters C and D 2 to 6 of article 27.4 of Law 19/1994 must be recorded.

  • In key [00527], of the amounts that reduced the tax base corresponding to the 2016 fiscal year (accounted for in the following fiscal year) the amount of those that have not yet materialized, in the tax period subject to declaration, in any of the investments referred to in letters A, B, B bis, C and D of article 27.4 of Law 19/1994 must be recorded.

  • In key [00922], the amounts by which the tax base corresponding to the 2017 financial year was reduced by the Canary Islands Investment Reserve (accounted for in the following financial year against the profits of the 2017 financial year) will be recorded.

  • In key [00923], of those amounts by which the tax base corresponding to the 2017 fiscal year was reduced (accounted for in the following fiscal year), the amount of those that have materialized, in the tax period subject to declaration, in any of the investments provided for in letters A, B, B bis and D 1 of article 27.4 of Law 19/1994 must be recorded.

  • In key [00924], of those amounts by which the tax base corresponding to the 2017 fiscal year was reduced (accounted for in the following fiscal year), the amount of those that have materialized, in the tax period subject to declaration, in any of the investments provided for in letters C and D 2 to 6 of article 27.4 of Law 19/1994 must be recorded.

  • In key [00925], of the amounts that reduced the tax base corresponding to the 2017 fiscal year (accounted for in the following fiscal year), the amount of those that have not yet materialized, in the tax period subject to declaration, in any of the investments referred to in letters A, B, B bis, C and D of article 27.4 of Law 19/1994 must be recorded.

  • In key [00927], the amounts by which the taxable base corresponding to the 2018 financial year is reduced by the Canary Islands Investment Reserve (accounted for in the following financial year against the profits of the 2018 financial year) will be recorded.

  • In key [00928], of those amounts by which the tax base corresponding to the 2018 fiscal year is reduced (accounted for in the following fiscal year), the amount of those that have materialized, in the tax period subject to declaration, in any of the investments provided for in letters A, B, B bis and D 1 of article 27.4 of Law 19/1994 must be recorded.

  • In key [00938], of those amounts by which the tax base corresponding to the 2018 fiscal year is reduced (accounted for in the following fiscal year), the amount of those that have materialized, in the tax period subject to declaration, in any of the investments provided for in letters C and D 2 to 6 of article 27.4 of Law 19/1994 must be recorded.

  • In key [00996], of the amounts that reduce the tax base corresponding to the 2018 fiscal year (accounted for in the following fiscal year), the amount of those that have not yet materialized, in the tax period subject to declaration, in any of the investments referred to in letters A, B, B bis, C and D of article 27.4 of Law 19/1994 must be recorded.

  • In key [00020], of the advance investments made in the 2018 financial year, of future provisions (even in the event that the latter are charged to the profits of the 2018 financial year) to the Reserve for investments in the Canary Islands, the amount of those made in any of those referred to in letters A, B, B bis and D 1 of article 27.4 of Law 19/1994 will be recorded.

  • In key [00021], of the advance investments, made in the year 2018, of future provisions (even in the event that the latter are charged to the profits of the year 2018) to the Reserve for investments in the Canary Islands, the amount of those that have been made in any of those referred to in letters C and D, 2 to 6, of article 27.4 of Law 19/1994 will be recorded.

Note:

Corporate Taxpayers who apply the corresponding reduction to the reserve for investments in the Canary Islands will be required to submit, within the deadline established for submitting the Corporate Tax return, a new information return approved by Order HAP /296/2016, of March 2, which approves form 282, "Annual information return on aid received within the framework of the Economic and Fiscal Regime of the Canary Islands and other state aid, derived from the application of European Union Law."