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Economic Activities Manual. Fiscal duties of employers and resident professionals in Spanish territory

4.6 Deductions to encourage certain activities

In the LIS, a series of deductions are regulated with the purpose of encouraging certain activities; they are practiced after the deductions to avoid double taxation and bonuses. Only a percentage of the investment made (% deduction) is deductible, the value of which varies from one type of investment to another.

Currently the following tax incentives are included:

  • Investigation and development.

  • Technological innovation.

  • Film productions, audiovisual series and live performing arts and musical shows. As of January 1, 2021, the application of this deduction (except foreign productions) is extended to taxpayers who participate in the financing of said productions.

  • Job creation for workers with disabilities.

  • Investments made by port authorities.

  • Business contributions to corporate social security systems.

  • Investment in profits and reinvestment of extraordinary profits.

The Budget Laws of each year are those that can establish the appropriate fiscal incentives for the execution of economic policy.