Skip to main content
Practical manual for Income Tax 2023.

For investment in companies that carry out agricultural activities

Regulations: Art. 5.Fifteen Text Consolidated version of the legal provisions of the Autonomous Community of Galicia on taxes transferred by the State, approved by Legislative Decree 1/2011, of July 28

Amounts and maximum limit of deduction

  • 20 percent of the amounts invested or, in the case of non-monetary contributions, of the value of the assets that they allocate in the year to the following investments:

    1. Acquisition of share capital as a result of agreements to form companies or increase capital, as well as any contribution to reserves in:

      1. Forestry development companies regulated by Law 7/2012, of June 28, on the forests of Galicia, and other types of joint management companies.

      2. Agricultural entities, agricultural cooperatives or community land exploitation entities whose exclusive purpose is agricultural activities.

      3. Entities whose purpose is the mobilization or recovery of agricultural land in Galicia under the instruments provided for in Law 11/2021, of May 14, on the recovery of agricultural land in Galicia.

      Note:the concept of “agricultural activity” will be the one included in Law 19/1995, of July 4, on the modernization of agricultural farms (article 3.Five Revised Text of the legal provisions of the Autonomous Community of Galicia on taxes ceded by the State, approved by Legislative Decree 1/2011, of July 28) .

    2. Loans made in favor of the same entities mentioned in letter a) above, as well as guarantees that the taxpayer personally constitutes in favor of these entities.

    3. Contributions that capital partners make to joint accounts established for the development of agricultural activities and in which the managing partner is one of the entities mentioned in letter a) above.

  • The maximum joint limit of the deduction is 20,000 euros, regardless of the number of members of the family unit who satisfy the amounts that entitle them to it.

Requirements and other conditions for the application of the deduction

  • The operations in which the deduction is applicable must be formalized in a public deed , in which the identity of the taxpayers who intend to apply this deduction and the amount of the respective operation must be specified.

  • The investments made must be kept in the taxpayer's assets for minimum period of five years, counted from the day following the date on which the transaction is formalized in public deed.

    In the case of financing operations, the maturity period must be greater than or equal to five years , without being able to amortize an amount greater than 20% per year of the principal amount lent.

    During the same five-year period the guarantees established must be maintained.

  • The taxpayer may be a member of the board of directors of the company in which the investment was made, but in no case may he/she carry out executive or management functions for a period of ten years, nor may he/she maintain an employment relationship with the entity that is the object of the investment during that same period, except in the case of worker-owned companies or cooperative companies.

Incompatibility

This deduction is incompatible with the deductions “For investment in the acquisition of shares or social participations in new or recently created entities”, “For investment in the acquisition of shares or social participations in new or recently created entities and their financing” and “For investment in shares of entities listed in the segment of expanding companies in the alternative stock market” included in numbers nine, ten and eleven of article 5 of Legislative Decree 1/2011.

The incompatibility refers to the same investment , that is, for each investment only one deduction may be applied (at the taxpayer's option), but nothing prevents that if several different investments are made, the corresponding deduction may be applied to each of them.

Note: Taxpayers entitled to this deduction must complete the section "Additional information on the Galician regional deduction for investment in companies that carry out agricultural activities " in Annex B.8 of the declaration, in which, in addition to the amount of the investment entitled to deduction, the NIF of the entity in which the investment is made, the loan is granted or the guarantee is constituted and, if applicable, that of the second entity must be stated, indicating the total amount of the deduction in the corresponding box.