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Practical Manual of Companies 2022.

Deductions for job creation (art. 37 LIS)

Important :

With effect for tax periods beginning on January 1, 2019 , the sole repealing provision of Royal Decree-Law 28/2018, of December 28, for the revaluation of pensions public and other urgent measures in social, labor and employment matters, repeals article 4 of Law 3/2012, of July 6, on Urgent Measures for the Reform of the Labor Market, which established the possibility of entering into indefinite employment contracts to support entrepreneurs .

However, the sixth transitional provision of the aforementioned Royal Decree-Law 28/2018 establishes that indefinite employment contracts to support entrepreneurs concluded until December 31, 2018, are considered valid and will continue to be governed by the regulations in force at the time of its celebration, as well as, where appropriate, the corresponding incentives.

Therefore, the contracts signed during 2018 will generate the right to apply the deduction for job creation of article 37 of the LIS . This deduction, as provided for in article 37 of the LIS, will be made in the full amount of the tax period corresponding to the end of the one-year trial period required in the corresponding type of contract.

Consequently, if the contract has been validly signed in 2018 and the trial period ends in a year this deduction may be applied to the full installment for fiscal year 2019 , in the event that the tax period coincides with the calendar year.

Regarding 2020 financial year and following years, the right to apply this deduction cannot be generated since as of January 1, 2019, this type of contract cannot be signed .

  1. Scope
  2. Requirements and amount of the deduction