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Practical Income Manual 2021.

Modalities

The application of the deduction for income obtained in Ceuta or Melilla presents different modalities depending on whether or not the taxpayer resides in Ceuta or Melilla and, in the case of taxpayers residing in said cities, depending on whether the period of residence is less than or equal to or more than 3 years. Consequently, the deduction has the following modalities:

  1. Taxpayers residing in Ceuta or Melilla for a period of less than three years

    In this case, the deduction consists of 60 per 100 of the part of the sum of the full state and regional contributions that proportionally corresponds to the income computed to determine the taxable bases that would have been obtained in Ceuta or Melilla.

  2. Taxpayers residing in Ceuta or Melilla for a period of no less than three years

    Taxpayers who have resided in Ceuta or Melilla for a period of no less than three years, in tax periods beginning after the end of that period, may apply the same deduction also for income obtained outside of said cities. .

    To do this, the following requirement must be met: q that at least one third of the net assets of the taxpayer , determined in accordance with the Wealth Tax regulations, is located in Ceuta or Melilla.

    The maximum amount of income, obtained outside said cities, that can enjoy the deduction will be the net amount of the income and capital gains and losses obtained in said cities .

  3. Non-resident taxpayers in Ceuta or Melilla

    Taxpayers not resident in Ceuta or Melilla may deduct 60 per 100 of the part of the sum of the full state and regional contributions that proportionally corresponds to the income computed for the determination of the positive taxable bases that would have been obtained in Ceuta or Melilla.

    Note: In no case can the deduction be applied, in this modality (taxpayers not resident in Ceuta and Melilla), on the following income:

    • Those from Collective Investment Institutions, except when all of their assets are invested in Ceuta or Melilla.

    • The performance of work.

    • Capital gains that come from movable property located in Ceuta or Melilla.

    • Income from deposits or accounts in all types of financial institutions located in Ceuta or Melilla.