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Practical Handbook for Companies 2021

Completion of the table “Special system of the reserve for investments in the Canary Islands (Law 19/1994)” (page 22 of form 200)

Entities that have applied the RIC in any tax period starting within the years 2016 to 2021 inclusive, should complete this table as indicated below:

Table RIC:

  • In the column "Pending materialisation of RIC at the beginning of the period" the amounts by which the tax base was reduced for the tax years 2016 to 2020, for the reserve for investments in the Canary Islands that at the beginning of the period have not yet materialised in any of the investments referred to in letters A, B, B bis, C and D of article 27.4 of Law 19/1994, will be entered.

  • The columns "Applied/materialised in this settlement" shall be completed:

    • In the column "Inversiones previstas letras A y B art. 27.4 Ley 19/1994", the amount of those amounts by which the tax base of previous years has been reduced since 2016 (provided for in the accounts in the following years), which have materialised in the tax period being declared, in any of the investments provided for in letters A and B of article 27.4 of Law 19/1994, must be entered.

    • In the column "Inversiones previstas letras B bis, C y D art. 27.4 Ley 19/1994", you must enter the amount of those amounts by which the tax base of previous years has been reduced since 2016 (booked in subsequent years), which have materialised, in the tax period being reported, in any of the investments provided for in letters B bis, C and D of article 27.4 of Law 19/1994.

    • In the column "Anticipated investments considered as materialisation of the RIC in this settlement" the amount of those investments made in previous periods or in this same period that are considered as anticipated materialisation of the RIC in this financial year should be entered.

  • In the column "Pending materialisation of RIC at the end of the period" the amount of the amounts that reduced the tax base and that remain pending materialisation at the end of the period should be entered.Pursuant to Article 27.4 of Law 19/1994, the amounts allocated to the RIC must be paid within a maximum period of three years from the date on which the tax accrued in the year in which the RIC was allocated.

  • In the box [00927] "Amount of the RIC allocation charged to 2021 profits", the amount by which the taxable base was reduced in the tax period being declared due to having made the allocation to the reserve for investments in the Canary Islands (allocated for accounting purposes in the following year against the profits of that year) should be entered, in accordance with the limit and other conditions established in article 27 of Law 19/1994.

    The amount entered in this box [00927] must coincide with the negative adjustment in box [00404] "Reserve for investments in the Canary Islands (Law 19/1994)" on page 13 of form 200.

    Remember:

    Corporate Income Tax taxpayers who apply the reduction corresponding to the reserve for investments in the Canary Islands, will be obliged to file within the period established for filing the Corporate Income Tax return, the informative return approved by Order HAP/296/2016, of 2 March, which approves the model 282 "Annual informative return of aid received within the framework of the Economic and Fiscal Regime of the Canary Islands and other state aid, derived from the application of European Union Law".

Advance investment table:

  • In the column "Pending endowment of RIC at the beginning of the period" the anticipated investments of future endowments to the RIC that would have been made in the financial years 2017 to 2020, for which, at the beginning of the period, the RIC has not yet been endowed, will be entered and will be charged against the profits of subsequent financial years.

  • In the column "Inversiones previstas letras A y B art. 27.4 Ley 19/1994", the amount of the anticipated investments made in the financial year 2021 pending future allocations to the reserve for investments in the Canary Islands (even in the event that the latter are charged to the profits of the financial year 2021) will be entered.The anticipated investment is the one made prior to obtaining the profit from which the RIC will be allocated, regardless of whether or not the first allocation of the RIC is made from the profits of the year in which it was invested or whether or not the allocation for that year covers the total of the anticipated investment.In this box, the investments made during 2021 in any of those referred to in letters A and B of Article 27.4 of Law 19/1994 shall be entered.

  • In the column "Inversiones previstas letras B bis, C y D art. 27.4 Ley 19/1994", the amount of the anticipated investments made in the financial year 2021 pending future allocations to the reserve for investments in the Canary Islands (even in the event that the latter are charged to the profits of the financial year 2021) should be entered.The anticipated investment is the one made prior to obtaining the profit from which the RIC will be allocated, regardless of whether or not the first allocation of the RIC is made from the profits of the year in which it was invested or whether or not the allocation for that year covers the total of the anticipated investment.In this box, the investments that have been made during 2021 in any of those referred to in letters B bis, C and D of Article 27.4 of Law 19/1994 shall be entered.

  • In the column "Pending endowment of RIC at the end of the period" the amount of anticipated investments of future endowments to the RIC that have been made and which, at the end of the period, are still pending endowment of the RIC against profits of subsequent years, although these endowments must be made against profits until 31 December 2021.

    Remember:

    In the tax period in which the anticipated investments are made, the materialisation and its financing system must be reported together with the corporate income tax return (see the section "Documentation to be submitted prior to the return" in Chapter 1 of this Practical Manual).