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Practical Manual of Companies 2022.


Regulation: Article 27.2 Law 19/1994

The reduction will be applied to the contributions that in each tax period are made to the RIC up to the limit of 90 percent of the part of the profit obtained in the same period that is not the subject of distribution, as long as it comes from establishments located in the Canary Islands.

In no case may the application of the reduction determine that the tax base is negative.

The allocations to the reserve for investments from profits from tax periods beginning before January 1, 2015, will be regulated by the provisions of the article 27 of Law 19/1994, of July 6, according to the wording in force as of December 31, 2014.

For these purposes, benefits from permanent establishments in the Canary Islands will be considered, those derived from operations carried out with the personal and material means assigned to it that close a commercial cycle that determines economic results, as well as as those derived from the transfer of assets not assigned to economic activities, provided that, in the latter case, they are elements of tangible fixed assets, real estate investments or intangible assets that have generated income for at least one year within the three years prior to the date of transmission.

Undistributed profits will be considered as those intended to nourish the reserves, excluding those of a legal nature.

Undistributed profits will not be considered as those derived from values representing the participation in the capital or own funds of other entities, as well as the transfer of own capital to third parties, except that These are entities that provide financial services.

With effect for tax periods beginning on or after November 7, 2018, will not be considered an undistributed profit , which derives from the transmission of assets whose acquisition was determined the materialization of the investment reserve endowed with benefits from tax periods starting on January 1, 2007.

In the case of assets that were only partially allocated to the materialization of the reserve as of January 1, 2007 , the proportional part thereof that corresponds to the value will be considered undistributed benefit. of acquisition that would not have entailed materialization of said reservation.

The allocations to reserves will be considered reduced by the amount that would eventually have been deducted from own funds, either in the year to which the reduction of the tax base refers, or in which the adopt the agreement to carry out the aforementioned assignments.