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Practical manual for Income Tax 2022.

f) Information to be provided in the personal income tax return

The maximum period for materializing the reserve for investments in the Canary Islands (RIC) is three years, pursuant to the provisions of article 27.4 of Law 19/1994, of July 6, amending the Economic and Fiscal Regime of the Canary Islands.

This three-year period must be counted from the date of accrual of the tax corresponding to the year in which the allocation (accounting) of the reserve occurs and said allocation in the case of natural persons may be:

  • at the close of the accounting period on December 31 of each year.

  • in the year following the year in which the profit is obtained.

The above determines that natural persons will have an effective period of three or four years to materialize the reserve for investments in the Canary Islands, depending on when they have made the accounting entry for the provision of the reserve (at the end of the financial year or in the following financial year). The design of the IRPF model responds to this duality (which does not occur in the case of Companies). However, as a consequence of the provisions of the eighth transitional provision of Law 19/1994, in the case of the reserve for investments with profits obtained in tax periods beginning in 2016, the period is extended by one year (therefore, the effective period will be four or five years depending on when the accounting entry for the provision of the reserve was made).

The information on provisions and materializations made in 2022 of the reserve for investments in the Canary Islands corresponding to the years 2016 to 2022 and anticipated investments of future provisions will be provided in accordance with the breakdown contained in the corresponding heading of Annex A.2 of the declaration of the following way:

Provisions and materializations made in 2022

  • Boxes [1643], [1681] , [0733], [0735], [0738], [0742] and [0746]

    The amount of the provisions corresponding to income obtained in the Canary Islands in the years 2016 to 2022 that have been allocated to the RIC will be indicated.

  • Boxes [1683], [1682] , [0734] [0789], [0792], [0794] and [0802]

    The year of the provision will be indicated (2017 to 2022) which, as mentioned before, may be at the end of the year in which the net operating income was obtained or in the following year.

  • Boxes [1692], [1684] , [0777], [0736], [0739], [0743], [0747] and [0750]

    The amount of the materializations made against the previously declared allocation in the investments provided for in letters A, B, B bis and D 1 of article 27.4 of Law 19/1994 will be indicated.

  • Boxes [1696] , [1685] , [0778], [0737], [0740], [0744], [0748] and [0751]

    The amount of the materializations made against the previously declared allocation in the investments provided for in letters C and D 2 to 6 of article 27.4 of Law 19/1994 will be indicated.

  • Boxes [0829], [0790], [0741], [0745], [0749]

    The amount of each of the previously declared provisions that is pending materialization as of December 31, 2022 will be indicated.

Covid-19: In relation to the information that must be provided regarding provisions and materializations of the RIC the following must be taken into account:

Fiscal years 2016 and 2017: 

Royal Decree-Law 39/2020, of December 29, on financial measures for social and economic support and compliance with the execution of judgments, introduced a new eighth transitional provision in Law 19/1994, of July 6, amending the Economic and Fiscal Regime of the Canary Islands, to extend by one year the maximum period for carrying out the materialization of the reserve for investments in the Canary Islands endowed with profits obtained in 2016, due to the serious effects that the pandemic had had on the realization of investments and economic results in 2020.

Furthermore, as a consequence of the health crisis situation caused by Covid-19, the ninth Additional Provision of Royal Decree-Law 11/2020 , of March 31, established that the deadlines for prescription and expiration of any actions and rights contemplated in the tax regulations were suspended from March 14 (date of entry into force of Royal Decree 463/2020, of March 14, which declares the state of alarm for the management of the health crisis situation caused by Covid-19), until May 30, 2020.

For this reason, if the reserve established with 2016 profits is allocated for accounting purposes in 2017, the aforementioned period is extended by 78 days, which means that the amount of the provision can be realized in 2022. Now, without any excess remaining pending materialization for the following year .

Likewise, if the reserve created with 2017 profits is recorded in 2018, even if the period has not been extended as in the previous case from 3 to 4 years, the extension of 78 more days applies, so it can also be The amount of the endowment will materialize in 2022, but there may be no excesses pending materialization for the following year.

Exercises 2018 and 2019: 

In order to complete the boxes [0790] and [0741] please note that, in accordance with the above, the ninth Additional Provision of the Royal Decree-Law 11/2020, of March 31, by which urgent complementary measures are adopted in the social and economic sphere to confront Covid-19, determines that the materialization period was suspended from March 14 to 30 May 2020.

Consequently, with respect to fiscal year 2018 , if the reserve constituted with profits from 2018 is recorded in 2019, the period to materialize the investment that ended on December 31, 2022 is extended by 78 days. further. Regarding the year 2019 , if the reserve constituted with profits from 2019 is allocated for accounting purposes in that year 2019, the term to materialize the investment that ended On December 31, 2022, it is extended by 78 more days.

Anticipated investments of future allocations to the Reserve for Investments in the Canary Islands, made in 2022

The information will be provided according to the following breakdown:

  • Box [0750].

    The amount of investments made in 2022 will be indicated for the early materialization of future provisions in those provided for in article 27.4. A, B, B bis and D 1, Law 19/1994.

  • Box [0751].

    The amount of investments made in 2022 will be indicated for the early materialization of future provisions in those provided for in article 27.4. C and D 2 to 6, Law 19/1994.

Covid-19: Please note, with regard to early investments of future provisions to the RIC made in previous years, that the Ninth Additional Provision of Royal Decree-Law 11/2020, of March 31, established that the prescription and expiration periods of any actions and rights contemplated in the tax regulations are suspended from March 14 (date of entry into force of Royal Decree 463/2020, of March 14, which declares the state of alarm for the management of the health crisis situation caused by Covid-19), until May 30, 2020.

For this reason, the deadlines for making the provision corresponding to the anticipated investments made in the years 2017 and 2018 end in the year 2022, by extending the period by 78 more days. And the anticipated investments from fiscal year 2019, whose provision period ended in fiscal year 2022, move to fiscal year 2023 as a consequence of said extension.