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Practical Handbook for Companies 2021

Scope of application of the specialities

The increased deduction percentages and other specialities of article 94 of Law 20/1991, only will be applied to the new system of deductions established in Chapter IV of Title VI of the LIS, where it is equivalent to the system of deductions of article 26 of Law 61/1978, of 27 December, on Corporate Income Tax.

The legal basis for this statement is as follows:

  1. The article 94.1 of Law 20/1991, of 7 June, establishes that increased deduction percentages and limits will be applied to the General Deduction Regime of Article 26 of Law 61/1978, of 27 December, provided that the investments are made in the Canary Islands.

  2. The first paragraph of the fourth transitional provision of Law 19/1994, of 6 July, amending the Canary Islands Economic and Fiscal Regime, establishes that in the event of abolition of the General Investment Deduction Regime regulated by Law 61/1978, of 27 December, its future application in the Canary Islands, until such time as an equivalent replacement system is established, will continue to be carried out in accordance with the regulations in force at the time of abolition.

  3. The article 26 of Law 61/1978, of 27 December was repealed by Law 43/1995, of 27 December, of Corporate Tax, which introduced in its place, the deductions to encourage the performance of certain activities in Chapter IV of its Title VI (currently, these deductions are regulated in Chapter IV of Title VI of the LIS).