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Practical Handbook for Companies 2021

Scope

The deduction for the acquisition of new fixed assets continues to be applied in the Canary Islands according to the regulations in force in 1996, i.e. in accordance with the twelfth additional provision of Law 43/1995 of 27 December 1995 on Corporation Tax and the special provisions introduced by Article 94 of Law 20/1991 and its implementing regulations.

The reason why this deduction continues to apply to investments made in the Canary Islands for the acquisition of new fixed assets is that the fourth transitional provision of Law 19/1994 establishes that, in the event of the abolition of the General System of Deduction for Investments regulated by Law 61/1978, of 27 December, on Corporation Tax, its future application in the Canary Islands, until an equivalent replacement system is established, will continue to be carried out in accordance with the regulations in force at the time of the abolition.

Law 61/1978 of 27 December 1978 was repealed by Law 43/1995 of 27 December 1995, which in its additional twelfth provision regulated the deduction for the acquisition of new fixed assets.Therefore, although this deduction was abolished from 1997 onwards from the general corporate income tax system, in accordance with the fourth transitional provision of Law 19/1994, the deduction continues to be applied in the Canary Islands in accordance with the rules in force for this deduction in 1996.