Skip to main content
Practical Handbook for Companies 2021

Practical example

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

The deduction for the acquisition of new fixed assets generated by entity A in previous years and to be applied in this year is:

  • Fiscal year 2015300 euros
  • Fiscal year 2016600 euros
  • Fiscal year 2017900 euros

The positive adjusted gross tax liability of entity A in 2020 (box [00582] on page 14 of Form 200) is 8,000 euros.

In order for this deduction to be applied, the 50/70 percent limits must be respected.These limits shall 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 year 2021:

  • Set 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 performed, this entity complies with the legal limits and will be able to apply the pending deduction in full in 2021, as well as the deduction generated in this year.

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

Deductions for investment in the Canary Islands with increased limits
(page 16a of model 200)
ExercisesDeduction
pending / generated
Applied in this
liquidation
Pending implementation
in future years
2015:Fixed assets (Law 20/1991) [00883] 300 [00884] 300 [00885] 0
2016:Fixed assets (Law 20/1991) [00785] 600 [00789] 600 [00790] 0
2017:Fixed assets (Law 20/1991) [01357] 900 [01358] 900 [01359] 0
2021:Fixed assets (Law 20/1991) [02332] 500 [02333] 500 [02334] 0