Rebates for income derived from the sale of tangible assets produced in the Canary Islands

Regulation: Article 26 Law 19/1994

Entities that are entitled to apply the bonus on income derived from the sale of tangible assets produced in the Canary Islands by themselves to the full quota will first mark box [00029] "Special regime for the Canary Islands" on page 1 of form 200.

Next, they must enter the bonus amount in box [00563] "Bonus on income from sales of tangible assets produced in the Canary Islands (art. 26 Law 19/1994)" on page 14 of form 200, taking into account the following:

• Bonus percentage: 50 percent, without prejudice to the limits established in the Community regulations that may affect it.

  For tax periods beginning on or after 7 November 2018, the Second Additional Provision of Royal Decree-Law 15/2014, of 19 November, establishes that with effect from 1 January 2015, the application of this bonus, as well as that of the tax benefits that are considered regional operating aid (Book II and article 94 of Law 20/1991, Law of the Autonomous Community of the Canary Islands, 4/2014, of 26 June, article 27 and Title V of Law 19/1994, and Twelfth Additional Provision of Law 43/1995, of 27 December), as well as aid for the transport of goods included in the scope of Royal Decree 362/2009, of 20 March and Order of 31 of July 2009 of the Minister of Public Works and Transport of the Government of the Canary Islands, will be subject to the limit of 30 percent of the beneficiary's annual turnover obtained in the Canary Islands.

• Entities that can apply the bonus: Entities domiciled in the Canary Islands or domiciled in other territories that are dedicated to the production of goods affected by the bonus in the Canary Islands, through a branch or permanent establishment.

• Bonus returns: Income derived from the sale of tangible assets produced by the entity itself in the Canary Islands, typical of agricultural, livestock, industrial and fishing activities, provided that, in the latter case, deep-sea fishing is landed in Canary Islands ports and handled or transformed in the archipelago.

  For tax periods starting on or after November 7, 2018, for the purposes of calculating the income derived from the sale of tangible assets produced in the Canary Islands, the following will be part of the same:

  • The amounts of aid derived from the specific supply regime, established under article 3.1.a) of Regulation ( EU ) No. 228/2013 of the European Parliament and of the Council.

  • The amounts of aid to producers derived from the Community Program to Support Agricultural Productions in the Canary Islands, established under article 3.1.b) of Regulation (EU) No. 228/2013 of the European Parliament and of the Council.

• Full rate subsidized: The total subsidized rate is the one that proportionally corresponds to the part of the taxable base that derives from the subsidized income.

  In the event that there are extra-accounting adjustments or compensation of negative tax bases, these will influence the amount of the bonus.

• This bonus will apply provided that it is not excluded from its application due to incompatibility with the receipt of certain State aid or conditioned by the provisions of the corresponding Community guidelines, or its enjoyment is prevented until the reimbursement of the State aid received and declared illegal and incompatible with the common market (see Additional Provision Twelfth of Law 19/1994, of July 6, additional provisions third to sixth of Royal Decree-Law 12/2006, of December 29 and additional provisions first and second of Royal Decree-Law 15/2014, of December 19).

• This bonus will not apply to income derived from the sale of tangible goods produced in the Canary Islands, typical of shipbuilding, synthetic fibres, the automobile industry, steel and coal industries.