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Practical Handbook for Companies 2021

Anticipated investments

Regulation:Article 27.11 Law 19/1994

As established in the first paragraph of Article 27.11 of Law 19/1994, taxpayers may carry out advance investments, which will be considered as materialisation of the RIC which will be charged to profits obtained in the tax period in which the investment is made or in the three subsequent periods, provided that the other requirements of the same are met.

These allocations must be made out of profits until 31 December 2021.

A tener en cuenta:

With effect from 30 December 2020, the eighth transitional provision of Law 19/1994, of 6 July, amending the Canary Islands Economic and Fiscal Regime establishes that the term referred to in first paragraph of article 27.11 of Law 19/1994, will be four years for anticipated investments materialised in 2017.

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).

The advance investments made in a tax period commencing before 1 January 2015 will be considered as materialisation of the reserve for investments of profits obtained in a subsequent tax period also commencing before that date, and will be governed by the provisions of article 27 of Law 19/1994, of 6 July, as amended at 31 December 2014.