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Practical Handbook for Companies 2021

Deductions to encourage certain activities that apply in the Canary Islands

Article 94.1.a) of Law 20/1991 establishes that the applicable rates on the investments made shall be 80 per cent higher than those of the general regime, with a minimum differential of 20 percentage points, so that, in order to calculate the rate applicable to each of the following deductions, the higher of the rate resulting from multiplying by 1.8 or adding 20 percentage points to the rate in question shall be chosen.


This increase in rates will only be applied on 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.

Below, we will detail the way in which the general deductions regulated in the LIS are applied in relation to investments made in the Canary Islands, making special mention of the increased rates and the special features of the limits: