Joint limit of deductions of articles 35, 36 and 38 LIS in the Canary Islands

• General joint limit: 60 percent or 90 percent

  In accordance with article 94.1.b) Law 20/1991, of June 7, 1991, the joint limit on the quota will always be 80 percent higher than that set in the general regime, with a minimum differential of 35 percentage points.

  Therefore, the joint limits of article 39.1 LIS are raised to 60 percent or 90 percent

  Consequently, the deductions for investments of articles 35, 36 and 38 LIS , applied in the Canary Islands in the tax period, may not jointly exceed 60 percent of the quota that results from reducing the sum of the full, state and regional contributions (boxes [0545] and [0546] of the declaration), in the total amount of deductions for investment in habitual residence (in the case of taxpayers to whom the transitional regime of this deduction is applicable), for investment in companies of new or recent creation, provided for in article 68.1 of the Personal Income Tax Law , and for actions for the protection and dissemination of Spanish Historical Heritage and World Heritage (∑ boxes [0547] and [0548] ; minus ∑ boxes [0549]; [0550] and [0551], respectively) . However, it will be raised to 90 percent when the amount of the deductions in articles 35 and 36 exceeds 10 percent of the aforementioned quota.

• Joint limit for the islands of La Palma, La Gomera and El Hierro: 70 percent or 100 percent

  However, starting in 2019 for the islands of La Palma, La Gomera and El Hierro, the minimum limit of 80 percent will increase to 100 percent and the minimum differential will go to 45 percentage points when the community aid regulations state allows it and these are investments contemplated in Law 2/2016, of September 27 and other laws of measures for the organization of the economic activity of these islands in accordance with what is established in article 1. Forty-one of Law 8/2018, of November 5, which modifies Law 19/1994, of July 6, modifying the Economic and Fiscal Regime of the Canary Islands (BOE of 6). Consequently, in these cases, for the islands of La Palma, La Gomera and El Hierro the joint limits (60 percent or 90 percent) are raised, respectively, to 70 percent and 100 percent .

  The application of the 90 percent limit (100 percent for the islands of La Palma, La Gomera and El Hierro) is conditional on compliance with the requirements for the 50 percent limit that is discussed when talking about the joint limit in the general deduction regime for incentives and stimuli for business investment of the Corporate Tax Law of this Chapter.

  The application of the limits provided for the islands of La Palma, La Gomera and El Hierro in those cases in which the taxpayer also generates deductions in other territories of the Canary Islands must attend simultaneously to the following rules:

  1. Deductions generated on the islands of La Palma, La Gomera and El Hierro must respect their own improved limit (70/100 per 100). Likewise, deductions generated in the rest of the Canary Islands must also respect their own improved limit (60/90 percent).
  2. In the event that there are both deductions in the three mentioned islands (La Palma, La Gomera and El Hierro) and in the rest of the Canary Islands, the maximum limit for both types of deductions will be upper, that is, the improved limit of the three islands (70/100 percent).
  3. In the event that deductions apply in the three mentioned islands and in the rest of the Canary Islands, the latter will not be able to benefit from the increased limit of the three islands.

• Application of the joint limit

  Finally, note that this joint limit on the quota is independent of the one corresponding to the investments covered by the General Regime of deductions of the LIS and the Regimes of support for events of exceptional public interest included in the Annex A.3) of the declaration.