4.6 Deductions to encourage certain activities

The LIS regulates a series of deductions with the aim of incentivizing certain activities. They are applied after deductions to avoid double taxation and bonuses. Only a percentage of the investment made is deductible (% deduction), the value of which varies from one type of investment to another.

The following tax incentives are currently available:

• Investigation and development.

• Technological innovation.

• Film productions, audiovisual series and live performances of performing and musical arts. As of January 1, 2021, the application of this deduction (except for 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.