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Practical manual for Income Tax 2023.

Modalities

The application of the deduction for income obtained in Ceuta or Melilla has different modalities depending on whether the taxpayer resides or not in Ceuta or Melilla and, in the case of taxpayers resident in these cities, depending on whether the period of residence is less than, equal to or greater 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

    For taxpayers who have their habitual and effective residence in Ceuta or Melilla, the deduction consists of 60 percent of the part of the of the full state and regional quotas that proportionally corresponds to the income computed for the determination of the taxable bases that would have been obtained in Ceuta or Melilla.

  2. Taxpayers residing in Ceuta or Melilla for a period of three years or more

    Taxpayers who maintain their habitual and effective residence in Ceuta or Melill for a period of no less than three years, in tax periods beginning after the end of that period, may also apply the same deduction 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 taxpayer , determined in accordance with the Wealth Tax regulations, is located in Ceuta or Melilla.

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

  3. Taxpayers without residence in Ceuta or Melilla

    Taxpayers who do not have their habitual and effective residence in Ceuta or Melilla may deduct 60 percent 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 returns on work.

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

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