E) Early investments in future charges
Regulations: Article 27,11 and transitional provision octava.2 of Act 19/1994, of 6 July, amending the Canary Islands Economic and Tax Regime
In accordance with the provisions of article 27,11 of Law 19/1994 of 6 July on the Economic and Tax Regime of the Canary Islands, taxpayers can make early investments, which will be considered as the materialization of the reserve for investments that are paid for benefits obtained in the tax period during which the investment is made or in the three subsequent years, provided that the remaining requirements are met in the same.
However, the term will be four years (instead of three years) for the early investments made in 2017.
The aforementioned allowances must be made against the profits obtained until 31 December 2021.
The aforementioned materialization and its financing system will be communicated jointly with the Personal Income Tax declaration for the tax period in which the early investments are made.
New: Royal Decree-Law 39/2020, of 29 December, on financial measures to support society and the economy and to comply with the execution of judgments, introduces a new transitional provision eight in Act 19/1994, of 6 July, amending the Economic and Tax Regime of Canary Islands, to extend the period for the provision of this reserve for the advance investments made in a year (three to four years) in 2017, and considered as the materialisation of the pandemic, due to the serious effects that the pandemic has had on the realisation of investments and economic results in 2020.