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Practical Handbook for Companies 2021

Deductions investment in the Canary Islands with increased limits (pages 16 bis and 17 of form 200)

Entities that are entitled to apply the deductions for investments made in the Canary Islands in the terms set out in the previous sections, shall enter the amount in the box [00590] "Deductions Canary Islands Investment" on page 14 of form 200.The amount entered in this box shall be the amount resulting from the completion of the breakdown table of the pages 16a and 17 of form 200 explained below.

In this table, the amounts relating to deductions on fixed assets generated in the tax periods 2010 to 2021, and to the deductions included in Chapter IV of Title VI of the LIS insofar as they are equivalent to Article 26 of Law 61/1978 generated in the tax periods 2001 to 2021, must be entered as detailed below:

  • The column "Joint limit" expresses the joint percentage to be applied to the gross tax liability less double taxation deductions and allowances (box [00582] "Positive adjusted gross tax liability" on page 14 of form 200), in order to determine the maximum amount applicable in the tax period being declared.

    A tener en cuenta:

    The deductions for investments in fixed assets from previous tax periods that are pending application as from the tax period being declared, will apply an individual limit of 50 per cent , and a joint limit of 70 per cent .

    With effect for tax periods starting on or after 7 November 2018, on the islands of La Palma, La Gomera and El Hierro, the individual limit of 50 per cent is raised to 60 per cent, and the joint limit from 70 per cent to 80 per cent.

    As regards the deductions set out in Chapter IV of Title VI of the LIS, insofar as they are equivalent to Article 26 of Law 61/1978, they will apply the joint limit of 60 per cent of the net tax liability for the tax period, which will be raised to 90 per cent when the amount of the deduction for research and development activities, corresponding to expenses and investments made in the tax period itself, exceeds 10 per cent of the said net tax liability.

    With effect for the tax periods beginning on or after 7 November 2018, on the islands of La Palma, La Gomera and El Hierro, the joint limit of 60/90 per cent, will be raised to 70/100 per cent, respectively.

  • The column "Year limit" indicates the last year in which the deduction may be applied, which will be the first of those indicated when the financial year coincides with the calendar year, provided that the financial year has a duration of twelve months.

  • In the column "Deductions pending/g1enerated", the amounts of the deductions for fixed assets and for investments included in Chapter IV of Title VI of the LIS, insofar as they are equivalent to article 26 of Law 61/1978, both from previous tax periods and from the current tax period, and which are pending application at the beginning of the tax period being declared, should be entered in the corresponding boxes.

    The rows "Fixed assets (Law 20/1991) 2021(*)", "Investments in the Canary Islands (Law 20/1991) 2021(*)" and "Investments in La Palma, La Gomera and El Hierro (Law 20/1991) 2021(*)", should only be filled in if they are deductions pending application corresponding to a previous tax period starting in 2021.

  • The column "Applied in this settlement" will include the part (or all, if applicable) of the amounts stated in the previous column "Deduction generated" relating to deductions for investments made in the Canary Islands, which are applied in the settlement corresponding to the period being settled.

    In the box [00590] the total of the amounts entered in the column "Applied in this tax assessment" which should be transferred to the box [00590] "Deductions in the Canary Islands" on page 14 of form 200 referring to the tax assessment.

  • The positive difference between the amount of deductions pending at the beginning of the tax period or generated in the tax period in the column "Deduction pending/generated", and the amount of deductions applied in the tax return for the tax period being reported in the column "Applied in this return", shall be entered in the column "Pending application in future periods" . This amount will be carried forward to future tax periods, unless the tax period being reported is the last one in which the corresponding deduction can be applied, in which case the outstanding balance of the deduction will be lost.

    A tener en cuenta:

    The amounts not deducted may be applied, within the limits applicable to them, in the tax returns for the tax periods ending in the 15 years immediately following and thereafter.

    However, the amounts corresponding to the deduction for research and development and technological innovation activities provided for in Article 35 of the LIS, may be applied in the tax returns for the tax periods ending in the 18 years immediately following and thereafter.

  • In the box [02287] "2021:Deduction for research and development in the Canary Islands generated in the tax period", the amount of the deduction for carrying out research and development activities generated in the year 2021 must be entered.

  • In the box [02288] "2021:Deduction for technological innovation in the Canary Islands generated in the tax period", the amount of the deduction for carrying out technological innovation activities generated in the year 2021 must be entered.

  • In the box [03356] "2021:Deduction for Spanish film productions in the Canary Islands generated in the tax period", the amount of the deduction for investments in Spanish film productions generated in the year 2021 must be entered.

  • In the box [00357] "2021:Deduction for live performances of performing arts and music in the Canary Islands generated in the tax period", the amount of the deduction for investments in live performances of performing arts and music generated in the year 2021 must be entered.