8.7.3 Summary table of deductions for investments in the Canary Islands

Notes to the table:

⁽¹⁾ Article 94.1. b) of Law 20/1991 establishes that the joint limit will always be 80 percent higher than that set for each modification of the deduction for investments in the general regime with a minimum differential of 35 percentage points.

This joint limit on deductions on the full amount, reduced by deductions to avoid double taxation and bonuses, is independent of the limit corresponding to investments covered by the general deduction regime of the Tax. ^(Back)

⁽²⁾ In accordance with the provisions of the fourth transitional provision of Law , the deduction for investments made in tangible fixed assets continues to apply in the Canary Islands.

Used fixed assets eligible for deduction must fall into one of the following categories:

• Machinery, facilities and tools.
• Information processing equipment.
• Internal and external transport elements, excluding vehicles that may be used by persons directly or indirectly linked to the company.

Likewise, the acquisition of the used fixed asset must represent a clear technological improvement for the company, and this circumstance must be proven, in the event of verification or investigation of the taxpayer's tax situation, by means of proof that the element subject to the deduction will produce or has produced any of the following effects:

• Decrease in the unit production cost of the good or service.
• Improving the quality of the good or service.

Finally, the taxpayer must keep available to the tax authorities a certificate issued by the transferor stating that the item being transferred has not previously benefited from the deduction for investments or the Investment Pension Fund regime. ^(Back)

⁽³⁾ Regarding the percentages established in article 35.1 of the LIS for research and development expenses, the increased percentages of article 94.1 a) of Law 20/1991 will apply.

For these purposes, 45 percent is applied to research and development expenses incurred in the year and 75.6 percent to excess expenses over the average incurred in the previous two years. Likewise, 28 percent of investments in tangible and intangible fixed assets, excluding real estate and land, are deductible, provided that they are exclusively used for research and development activities. Finally, there is an additional deduction of 37 percent applicable to personnel costs corresponding to qualified researchers assigned exclusively to research and development activities.

These deductions will not be subject to the joint limit of 60/90 percent in the event that the option provided for in article 39.2 of the LIS is exercised. ^(Back)

⁽⁴⁾ The Thirteenth Additional Provision of Law 19/1994 establishes that 45 percent will be applied to the deduction for technological innovation activities carried out in the Canary Islands and that meet the criteria established in article 35.2 of the LIS.

The increased percentages of article 94.1 a) of Law 20/1991 will not be applied to this deduction.

These deductions will not be subject to the joint limit of 60/90 percent in the event that the option provided for in article 39.2 of the LIS is exercised. ^(Back)

⁽⁵⁾ The deduction percentages established in article 36.1 of the LIS for investments in Spanish productions of feature films and audiovisual series of fiction, animation or documentary, which allow the creation of a physical support prior to their serial industrial production carried out in the Canary Islands, will be increased according to the provisions of article 94.1 a) of Law 20/1991 .

Likewise, the Fourteenth Additional Provision of Law 19/1994 establishes a specific limit for this deduction of article 36.1 of the LIS, indicating that said deduction may not exceed 5.4 million euros when it concerns productions made in the Canary Islands. ^(Back)

⁽⁶⁾ The deduction percentages established in article 36.2 of the LIS for investments in foreign productions of feature films or audiovisual works that allow the creation of a physical support prior to their serial industrial production carried out in the Canary Islands, will be increased according to the provisions of article 94.1 a) of Law 20/1991 .

Likewise, the Fourteenth Additional Provision of Law 19/1994 establishes a specific limit for this deduction in article 36.2 of the LIS, indicating that said deduction may not exceed 4.5 million euros when it concerns productions made in the Canary Islands.

⁽⁷⁾ The deduction percentages established in article 36.3 of the LIS for expenses incurred in the Canary Islands in the production and exhibition of live shows of performing and musical arts, will be increased according to the provisions of article 94.1 a) of Law 20/1991.

Likewise, the Fourteenth Additional Provision of Law 19/1994 establishes a specific limit for this deduction of article 36.3 of the LIS, indicating that said deduction may not exceed 900,000 euros when it concerns expenses incurred in the Canary Islands. ^(Back)

⁽⁸⁾ In the Canary Islands, the deduction for job creation for disabled workers in Article 38 of the LIS is applied, which establishes a deduction of 9,000 euros for each person/year of increase in the average number of disabled workers to a degree equal to or greater than 33 percent and less than 65 percent, compared to the average number of workers in the previous year. If the degree of disability is equal to or greater than 65 percent, the deduction will be 12,000 euros.

The increased percentages of article 94.1 a) of Law 20/1991 will not be applied to this deduction.