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 which for each modification of the investment deduction is set in the general regime with a differential minimum of 35 percentage points.

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

⁽²⁾ In accordance with the provisions of the fourth transitional provision of Law 19/1994 , in the Canary Islands the deduction for investments made in elements of tangible fixed assets continues to be applied.

Used fixed assets that give the right to deduction must belong to one of the following categories:

• Machinery, installations and tools.
• Information processing equipment.
• Elements of internal and external transport, excluding vehicles that may be used by people directly or indirectly linked to the company.

Likewise, the acquisition of the used fixed asset element must represent an evident technological improvement for the company, and this circumstance must be proven, in the case of verification or investigation of the taxpayer's tax situation, by justifying that the element object of the deduction is to produce or has produced any of the following effects:

• Reduction in the unit production cost of the good or service.
• Improvement of the quality of the good or service.

Finally, the taxpayer must keep at the disposal of the Tax Administration certification issued by the transferor stating that the item object of the transfer has not previously enjoyed the deduction for investments or the Investment Provident Fund regime. ^(Back)

⁽³⁾ On 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 be applied .

For these purposes, 45 percent is applied to research and development expenses incurred during the year, and 75.6 percent is applied to excess expenses with respect to the average of those incurred in the previous two years. Likewise, 28 percent of investments in elements of tangible and intangible assets are deductible, excluding real estate and land, provided that they are exclusively used for research and development activities. Finally, there is an additional 37 percent deduction applicable to personnel expenses 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 that are carried out in the Canary Islands and 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 apply 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 documentaries, which allow the production of a physical medium prior to their serial industrial production carried out in the Canary Islands, they 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 It may not exceed 5.4 million euros in the case of 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 preparation of a physical support prior to their serial industrial production carried out in the Canary Islands, they 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 36.2 of the LIS, indicating that said deduction may not exceed 4.5 million euros in the case of 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 performing arts and musical shows will be increased according to the provisions of the 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 is of 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 increase in the average workforce of disabled workers to a degree equal to or greater than 33 percent and less than 65 percent, compared to the average staff of 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 apply to this deduction.