Article 39.1 LIS (Joint limit)

Regulations: Art. 69.2 Personal Income Tax Law and 39 LIS

The deduction limits provided for in article 39.1 of the LIS are applied in the Personal Income Tax on the quota resulting from reducing the sum of the full quotas , state and regional (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 new or recently created companies, 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) .

In relation to these limits, article 39.1 of the LIS establishes that the amount of deductions to encourage the performance of certain activities (excluding the deduction for expenses executing a foreign feature film production cinematographic or audiovisual works referred to in article 36.2 of the LIS that is not subject to these limits), applied in the tax period, may not jointly exceed of 25 per 100 of the previously defined quota.

However, this limit is raised to 50 percent when the amount of deductions for research and development and technological innovation activities provided for in article 35 of the LIS , which corresponds to expenses and investments made in the tax period itself, exceeds 10 percent of the previously defined quota (that is, the total full personal income tax quota, reduced by the deductions for protection and dissemination of Historical Heritage Spanish and World Heritage and for investments in habitual residence and in new or recently created companies).

When there are pending balances of deductions from previous years, the appropriate limit (25 percent or 50 percent) will be applied jointly to the deductions for fiscal year 2020 and the pending balances from previous years .