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2018 Wealth Tax

4.3.6.1 Deductions from the Autonomous Community of Galicia

For the 2018 financial year, taxpayers residing in the Autonomous Community of Galicia may apply the following deductions:

FOR THE CREATION OF NEW COMPANIES OR EXPANSION OF THE ACTIVITY OF RECENTLY CREATED COMPANIES

If among the assets and rights computed for determining the tax base there is any to which deductions were applied in the autonomous integral rate of personal income tax relating to the creation of new companies or expansion of the activity of recently created companies, or investment of shares or social participations in new or recently created entities.

75 percent of the portion of the quota that proportionally corresponds to the aforementioned assets or rights may be deducted.

Failure to comply with the requirements set out in the regulations for the aforementioned personal income tax deductions will result in the loss of this deduction in the asset declaration.

Incompatibility This deduction is incompatible with the other deductions except, "For the allocation of rustic land to an agricultural operation" and "For the allocation of real estate in historic centers to economic activities"

FOR INVESTMENT IN FORESTRY DEVELOPMENT COMPANIES

If the assets or rights of economic content computed for determining the tax base include shares in Forest Development companies. To apply this deduction, the assets must be kept in the taxpayer's assets for a minimum period of 5 years from their acquisition.

100 of the portion of the quota that proportionally corresponds to the aforementioned assets or rights may be deducted.

FOR PARTICIPATION IN THE SHARE CAPITAL OF AGRICULTURAL COOPERATIVES OR COMMUNITY LAND EXPLOITATION.

To be eligible for this deduction, the following requirements must be met:
- That the assets or rights of economic content computed for the determination of the tax base include shares in the share capital of agricultural cooperatives or community land exploitation cooperatives referred to in Law 5/1998, of December 18, on cooperatives in Galicia.
- The shares must remain in the taxpayer's assets for a minimum period of five years following their acquisition.

of the share of the quota that proportionally corresponds to the aforementioned assets or rights may be applied.


Incompatibility
This deduction will be incompatible with the application to the same assets or rights of the exemptions of article 4 of the Wealth Tax Law, even if said exemption is partial.

PO R THE ALLOCATION OF RUSTIC LANDS TO A FARM AND RUSTIC LEASE.

Requirements for applying the deduction:


1. Agricultural exploitation

 That among the assets or rights of economic content computed for the determination of the tax base are included rustic lands assigned to an agricultural operation.

 The agricultural holding must be registered in the Register of Agricultural Holdings of Galicia.

2. Rustic lease
l Taxpayers who lease rustic land for the same period of time, in accordance with the conditions established in Law 49/2003, of November 26, on rustic leases, will also be entitled to this deduction.

Taxpayers may deduct 100 percent of the portion of the tax that proportionally corresponds to the aforementioned assets or rights, provided that they are assigned to the agricultural operation for at least half of the calendar year corresponding to the accrual.

Incompatibility
This deduction will be incompatible with the application to the same assets or rights of the exemptions of article 4 of the Wealth Tax Law, even if said exemption is partial.

FOR PARTICIPATION IN THE OWN FUNDS OF AGRICULTURAL ENTITIES.

Requirements
- That the assets or rights of economic content computed for the determination of the tax base include shares in the equity of entities whose corporate purpose is agricultural activities.
- The acquired shares must remain in the taxpayer's assets for a minimum period of five years following their acquisition.
- The agricultural holding must be registered in the Registry of Agricultural Holdings of Galicia.

- The same deduction will apply to loans granted to the same entities in the part of the amount that finances said agricultural activities.
- In the case of loans, these must refer to financing operations with a term of more than five years, without being able to amortize an amount greater than 20% per year of the principal amount lent.

Taxpayers may deduct of the portion of the that proportionally corresponds to the value of the shares.
 The value of the shares will be determined, according to the rules of the Wealth Tax, in the part that corresponds to the proportion existing between the assets necessary for the exercise of the agricultural activity, reduced by the amount of the debts derived from this, and the value of the net assets of the entity.
To determine this proportion, the value deduced from the accounting records will be taken, provided that this faithfully reflects the true financial situation of the company.


Incompatibility
This deduction will be incompatible with the application to the same assets or rights of the exemptions of article 4 of the Wealth Tax Law, even if said exemption is partial.

DUE TO THE IMPACT ON ECONOMIC ACTIVITIES OF PROPERTIES IN HISTORIC CENTERS

Requirements
- That among the assets or rights of economic content computed for the determination of the tax base, real estate located in one of the historic centers determined in the annex of the Order of March 1, 2018 (DOG of 13) are included
- That said real estate is affected by an economic activity for at least half of the calendar year corresponding to the accrual.

Taxpayers will be able to deduct 100% of the portion of the tax that proportionally corresponds to said assets.


Incompatibility
This deduction will be incompatible with the application to the same assets or rights of the exemptions of article 4 of the Wealth Tax Law, even if said exemption is partial.

FOR PARTICIPATION IN THE OWN FUNDS OF ENTITIES THAT EXPLOIT REAL ESTATE IN HISTORIC CENTERS

Requirements
- That the assets or rights of economic content computed for the determination of the tax base include shares in the equity of entities whose assets include real estate located in one of the historic centers determined in the annex of the Order of March 1, 2018.
- That said real estate assets are affected by an economic activity for at least half of the calendar year corresponding to the fiscal year.

Taxpayers may deduct 100 percent of the portion of the quota that proportionally corresponds to said shares.
- The deduction will only apply to the value of the shares, determined according to the rules of this tax, in the part that corresponds to the proportion existing between said real estate assets, reduced by the amount of the debts used to finance them, and the value of the net worth of the entity.
To determine this proportion, the value deduced from the accounting records will be taken, provided that this faithfully reflects the true financial situation of the company.
Incompatibility
This deduction is incompatible with the application to the same assets or rights of the exemptions of article 4 of the Wealth Tax Law, even if said exemption is partial.