Practical example

Entity "A" with tax domicile in the Canary Islands has made investments in the Canary Islands in the 2021 financial year that entitle it to apply the deduction for the acquisition of new fixed assets (DAF). The deduction generated in this year is 500 euros.

The deduction for the acquisition of new fixed assets generated by entity "A" in previous years pending application and which will be applied in this year is:

• Exercise 2015: 300 euros
• Exercise 2016: 600 euros
• Fiscal year 2017 900 euros

The positive adjusted gross tax rate of entity "A" in the 2020 financial year (box [00582] on page 14 of form 200) is 8,000 euros.

In order to apply this deduction, this entity must respect the 50/70 percent limits. These limits will be calculated as follows:

• DAF/2015: 300 < 8,000 x 0.5 = 4,000
• DAF/2016: 600 < 8,000 x 0.5 = 4,000
• DAF/2017: 900 < 8,000 x 0.5 = 4,000

Deduction for the 2021 financial year:

• Joint limit:

  300 + 600 + 900 = 1,800 < 8,000 x 0.7 = 5,600

• Individual limit:

  DAF/2020: 500 < 8,000 x 0.5 = 4,000

According to the calculations made, this entity complies with the legal limits and will be able to apply the pending deduction in full in fiscal year 2021, as well as the deduction generated in this fiscal year.

According to this example, entity "A" must transfer the amount of the amounts corresponding to the deduction for the acquisition of new fixed assets to the box "Deductions for investment in the Canary Islands with increased limits" on pages 16 bis and 17 of form 200 as follows: