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Form 200. Corporate Income Tax Declaration 2019

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 RDL 12/2006, of December 29, modifying the Economic and Fiscal Regime of the Canary Islands, must be taken into account.

The provisions of the sole transitional provision of RDL 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 benefits not suitable for providing the RIC to the income that has benefited from the deduction regime of article 42 of the 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, completing, where appropriate, the corresponding breakdown boxes, 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.

They will record in key [00403] as an increase to the accounting result, completing, where appropriate, the corresponding breakdown boxes, the amounts allocated at the time to the reserve for investments in the Canary Islands that gave rise to the reduction of the tax base and that, because the reserve was used prior to the investment maintenance period or for investments other than those admitted, as well as because of 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 any of the aforementioned circumstances occurring therein.

In the case of cooperative societies, the amount reflected in key [00403] or [00404] must be transferred to key [C10] for cooperative results and [E10] for non-cooperative results 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].

Completion of the table "Special reserve regime for investments in the Canary Islands (Law 19/1994)" (page 22 of form 200)

Entities that have applied the RIC in any tax period beginning between 2015 and 2019 inclusive, must complete this table as indicated below:

  • In column "Amount of the provision" the amounts by which the tax base was reduced from the years 2015 to 2019 will be recorded, due to the reserve for investments in the Canary Islands (provided for in the following years from the profits of said years).

  • In column "Investments planned letters A, B, B bis and D (1) art. 27 Law 19/1994" , of those amounts by which the tax base was reduced for the years 2015 to 2019 (accounted for in the following years), the amount of those that have materialized, in the tax period subject to declaration, in any of the investments planned in letters A, B and D.1o of article 27.4 of Law 19/1994 must be recorded.

  • In column "Investments planned letters C and D (2 to 6) art. 27 Law 19/1994" , of those amounts by which the tax base was reduced for the years 2015 to 2019 (accounted for in the following years), the amount of those that have materialized, in the tax period subject to declaration, in any of the investments planned in letters C and D.2nd to 6th of article 27.4 of Law 19/1994 must be recorded.

  • In column "Pending materialization" of the amounts that reduced the tax base corresponding to the years 2016 to 2019 (accounted for in the following years), the amount of those that have not yet been 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 row "Early investments of future provisions to the RIC, made in 2019" , the following must be entered:

    • In key [00020] , of the advance investments of future provisions made in the year 2019 (even in the event that the latter are charged to the profits of the year 2019) 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 A, B, B bis and D.1o of article 27.4 of Law 19/1994.

    • In the key [00021] , of the advance investments of future provisions made in the year 2019 (even in the event that the latter are charged to the profits of the year 2019) 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.

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 filing the Corporate Tax return, form 282 of « Annual information declaration of 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≫, approved by Order HAP/296/2016, of March 2.