Skip to main content
Form 200. Corporate Income Tax Declaration 2018

8.4.3.6 2018: Deductions for job creation, hiring of unemployed people with loans. unemployment (CEM-2)

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

The reporting entity must enter in code [00931] the amount that is attributable to it in the tax period object of declaration, in code [00502] the amount that, of said amount, applies in the tax period object of declaration, and in the key [00751] the part of that amount that, due to not having been included in the key [00502], remains pending for future periods.

Deduction amount

50% of the lesser of the following amounts:

  • The amount of unemployment benefit that the worker had pending to receive at the time of hiring.

  • The amount corresponding to twelve monthly payments of the unemployment benefit that was recognized.

The application of this deduction, which does not exclude the application of the deduction for job creation for hiring people under 30 years of age, is subject to the following requirements:

  • Have a workforce of less than 50 workers at the time of hiring unemployed beneficiaries of a contributory unemployment benefit (regulated in the General Social Security Law).

  • The deduction will be applied to contracts made in the tax period until a workforce of 50 workers is reached.

  • In the twelve months following the beginning of the employment relationship, for each worker there must be an increase in the entity's total average workforce by at least one unit compared to that existing in the previous twelve months.

  • The hired worker must have received unemployment benefits for at least three months before the start of the employment relationship. For these purposes, the worker must provide the entity with a certificate from the State Public Employment Service.

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 indicated in this article will determine the loss of the deduction, which will be regularized 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 recognized as appropriate, resignation, death, retirement or permanent total, absolute disability or great disability of the worker.

The hired worker who gives the right to one of the aforementioned deductions 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

The amounts not deducted due to insufficient quota may be applied in the settlements of the tax periods that end in the immediate and subsequent 15 years.

Note:

With effect for tax periods beginning on or after November 7, 2018, Law 8/2018, of November 5, which modifies Law 19/1994, of July 6, adds article 94 bis in Law 20/1991, of June 7, modifying the fiscal aspects of the Economic Fiscal Regime of the Canary Islands, which includes in the Canary Islands the application of deductions for job creation of 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 through an indefinite-term contract to support entrepreneurs, who is under 30 years old.

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