8.7.1 Requirements and particularities

Entities with tax domicile in the Canary Islands are entitled to apply a series of deductions for investments made and remaining in the Canary Islands, for which Article 94 of Law 20/1991, of June 7, modifying the fiscal aspects of the Economic Fiscal Regime of the Canary Islands establishes in the Corporate Tax the particularity consisting of the application of higher percentages and deduction limits than those established in the general deduction regime:

• The rates applicable to investments made will be 80 percent higher than those of the general regime, with a minimum differential of 20 percentage points.

• The deduction for investment in the Canary Islands will have as a maximum limit the percentage indicated below of the net quota resulting from reducing the total quota by the amount of the deductions for double taxation and, where applicable, the bonuses provided for in article 25 of Law 61/1978, of December 27, on Corporate Tax.

  This percentage 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. The deduction limit is therefore set at 60 percent of the net tax rate for the tax period, which rises to 90 percent when the amount of the deduction for research and development activities, corresponding to expenses and investments made in the tax period itself, exceeds 10 percent of said net tax rate.