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Form 200. Corporate Income Tax Declaration 2018

8.4.3.5 2018: Deductions for job creation by hiring people under 30 (CEM-1)

Entities may apply the deductions established in article 37 of the LIS provided that they hire through the indefinite employment contract to support entrepreneurs defined in article 4 of Law 3/2012, of July 6, on Urgent Measures for the Reform of the Labor Market.

The reporting entity must record in code [00963] the amount attributable to it in the tax period subject to the declaration, in code [00964] the amount of said amount that it applies in the tax period subject to the declaration, and in code [00965] the part of that amount that, because it was not included in code [00964], remains pending for future periods.

Amount of deduction

Entities will be able to deduct 3,000 euros from the total amount of corporate tax for hiring the first employee under the age of 30 through an open-ended contract to support entrepreneurs.

This deduction will be applicable exclusively to those entities that do not have hired personnel.

Application of the deduction

These deductions will be applied to the full amount of the tax period corresponding to the end of the one-year trial period required in the corresponding type of contract and will be conditional on maintaining this employment relationship for at least 3 years from the date of its start.

Failure to comply with any of the requirements set out in this article will result in the loss of the deduction, which will be regularised in the manner established in article 125.3 of the LIS.

However, the obligation to maintain employment will not be deemed to have been breached when the employment contract is terminated, once the trial period has elapsed, for objective reasons or disciplinary dismissal when one or the other is declared or recognised as appropriate, resignation, death, retirement or permanent total, absolute or severe disability of the worker.

The contracted worker who gives the right to one of the deductions referred to will not be counted for the purposes of the increase in staff established in article 102 of the LIS.

Deadline to apply for the deduction

Amounts not deducted due to insufficient quota may be applied in the liquidations of the tax periods that end in the next 15 years.

Note:

With effect for tax periods beginning on or after 7 November 2018, Law 8/2018 of 5 November, which modifies Law 19/1994 of 6 July, adds Article 94 bis to Law 20/1991 of 7 June, amending the tax aspects of the Canary Islands Economic and Fiscal Regime, which includes in the Canary Islands the application of deductions for job creation in Article 37 of the LIS.

According to the provisions of article 94 bis of Law 20/1991, entities that hire a worker to carry out their activity in the Canary Islands will have the right to apply the deductions for job creation of article 37 of the LIS, increased by 30 percent:

  • Job creation by hiring people under 30 years of age: 3,900 euros for hiring the first worker under 30 years of age through an open-ended contract to support entrepreneurs.

  • Job creation by hiring unemployed people with unemployment benefits: 65 percent of the lowest of the amounts specified in letters a) and b) of article 37.2 of the LIS.