By investment in social economy entities

Regulations: Art. 12 septies Law 8/2013, of November 21, of the Autonomous Community of Castilla-La Mancha, on Tax Measures

Amount and maximum limit of the deduction

• 20 percent of the amounts invested during fiscal year in contributions made with the purpose of being a partner in entities that are part of the social economy.

• The applicable deduction limit is 4,000 euros per year per taxpayer.

Requirements and other conditions for the application of the deduction

To apply the deduction, the following requirements and conditions must be met:

• The participation achieved by the taxpayer as a consequence of the contribution made, computed together with the share held in the same entity by his or her spouse or persons linked to the taxpayer by reason of kinship up to and including the third degree, in a straight or collateral line, by consanguinity or affinity, cannot exceed 40 percent of the total share capital of the entity object of the investment or its voting rights .

• That the entity in which the investment must materialize meets the following requirements:

  1. That is part of the social economy, in the terms provided for in Law 5/2011, of March 29, on the Social Economy.

  2. That has its social and tax domicile in the Community of Castilla-La Mancha .

  3. That has, at least, one employed person with a full-time employment contract, and registered in the general Social Security regime.

• The operations that generate the right to deduction must be formalized in public deed, in which the identity of the investors and the amount of the respective investment.

• That said contributions be maintained in the assets of the taxpayer for a minimum of five years counting from the contribution .

• The requirements that must be met by the entity in which the investment must materialize must be met for a minimum period of five years counting from the contribution.

Loss of the right to the deduction made

Failure to comply with the above requirements and conditions, except for those relating to the formalization of operations in a public deed, entails the loss of the tax benefit and, in such case, the taxpayer must include in the Personal Income Tax declaration corresponding to the year in which the non-compliance occurred, the part of the tax that had not been paid as a result of the deduction made, together with the late payment interest accrued.

Incompatibility

This deduction will be incompatible , for the same investments, with the deduction "For investment in the acquisition of shares and social participations as a consequence of agreements to establish companies or increase capital in companies commercial" previously mentioned.

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