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Practical manual for Income Tax 2023.

For investment in social economy entities

Regulations: Art. 110-19 Text Consolidated version of the provisions issued by the Autonomous Community of Aragon on transferred taxes, approved by Legislative Decree 1/2005, of September 26

Amount of deduction and maximum limit

  • 20 percent of the amounts invested during the year in contributions made for the purpose of becoming a partner in entities that form part of the social economy referred to in the following section.

  • The maximum amount of this deduction is 4,000 euros , both in individual taxation and in joint taxation.

Requirements and other conditions for the application of the deduction

The application of this deduction is subject to compliance with the following requirements and conditions:

  1. The participation achieved by the taxpayer, computed together with those of the spouse or persons related by reason of kinship, in a direct or collateral line, by consanguinity or affinity up to the third degree included, not exceed 40% of the capital of the entity that is the object of the investment or its voting rights.

  2. The entity in which the investment is to be made must meet the following requirements :

    1. Be part of the social economy , under the terms set forth in Law 5/2011, of March 29, on the Social Economy ( BOE of March 30).

      According to article 6 of Law 5/2011: "The Ministry of Labour and Immigration (currently the Ministry of Labour and Social Economy), following a report from the Council for the Promotion of the Social Economy, and in coordination with the Autonomous Communities, will prepare and maintain an updated catalogue of the different types of entities comprising the social economy, taking into account the principles established in this law and in a coordinated manner with the existing catalogues at the autonomous level.

      Catalogues of social economy entities must be public. Advertising will be carried out by electronic means."

    2. Have your registered office and tax domicile in Aragon .

    3. Have, at least, one person employed with full-time employment contract, and registered in the general Social Security system.

  3. The requirements set out in points 1, 2 and 3 above must be met for a minimum period of five years from the contribution.

  4. Operations in which deduction is applicable must be formalized in public deed , in which the identity of the investors and the amount of the respective investment will be recorded.

  5. Contributions must remain in the taxpayer's assets for minimum period of five .

Loss of the right to the deduction made

Failure to comply with the requirements and conditions set out in letters a, d and e above will result in the loss of the tax benefit and, in such case, the taxpayer must include in the tax return corresponding to the year in which the failure occurred the part of the tax that was not paid as a result of the deduction made, together with any accrued late payment interest.

Incompatibility

This deduction will be incompatible , for the same investments , with the deductions "For investment in shares of entities listed in the expansion segment of the Alternative Stock Market" and "For investment in the acquisition of shares or social participations in new or recently created entities."

Note: Taxpayers entitled to the deduction must complete section "Additional information on the regional deduction for investments or donations to Social Economy entities established in Aragon, Cantabria and Castilla-La Mancha" of Annex B.8 of the declaration in which, in addition to the amount of the investment entitled to deduction, the NIF of the entity and, if applicable, of the second entity must be stated, indicating the amount of the investment entitled to the deduction in the corresponding box.