2. General deduction system
The business investments that in the 2020 financial year determine the right to deduct for this concept are contained in articles , 36 and of Law 27/2014, of November 27, on Corporate Tax (hereinafter LIS).
Deduction for job creation in article 37 of the LIS: With effect for tax periods beginning on 1 January 2019, the sole repealing provision of Royal Decree-Law 28/2018 of 28 December 2018 on the revaluation of public pensions and other urgent measures in social, labour and employment matters repealed Article 4 of Law 3/2012 of 6 July 2012 on Urgent Measures to Reform the Labour Market, which established the possibility of entering into open-ended employment contracts to support entrepreneurs.
However, the sixth transitional provision of the aforementioned Royal Decree-Law 28/2018 maintained the validity of those contracts that had been signed prior to said date (January 1, 2019) under the regulations in force at the time of their signing and those of their corresponding incentives.
As a result of the above, the deduction for job creation in article 37 of the LIS will continue to apply to open-ended employment contracts to support entrepreneurs entered into before January 1, 2019.
Deduction of article 37 of the LIS had to be applied to the full amount of the tax period corresponding to the end of the one-year trial period required in the corresponding type of contract. Therefore, for contracts validly signed in 2018 whose trial period ended in one year, the deduction could be applied to the full 2019 fee.
Unlike the previous year, in principle, the right to apply this deduction will not be generated in 2020, since this type of contract cannot be signed as of January 1, 2019.
Furthermore, in accordance with the provisions of section 5 of the twenty-fourth transitional provision of the LIS , the deduction for investments of article 37 of the consolidated text of the Corporate Tax Law is applicable in those cases in which the investment in assets related to economic activities is made in accordance with a special investment plan approved by the tax authorities at the proposal of the taxpayer and said plan allows the net income from economic activities for the 2014 tax period to be invested in new tangible fixed assets or real estate investments in the 2020 financial year.
The table where each of these types of deductions are collected, their deduction percentage and the joint limit, as well as a specific study and commentary on each of these deductions, is included in the following sections:
- General deduction regime table (Law 27/2014, of November 27, on Corporate Income Tax)
- Article 35 LIS "Deduction for research and development activities and technological innovation"
- Article 36 LIS "Deduction for investments in cinematographic productions, audiovisual series and live shows of performing and musical arts"
- Deduction for investment of profits (previously art. 37 TRLIS)
- Article 38 LIS "Deduction for job creation for workers with disabilities"
- Article 39.1 LIS (Joint limit)