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Practical Manual for Companies 2023.

Deductions for investment in the Canary Islands with increased limits (page 16 bis of form 200)

Entities that are entitled to apply deductions for investments made in the Canary Islands under the terms set out in the previous sections will record their amount in box [00590] "Canary Islands Investment Deductions" on page 14 bis of form 200. The amount entered in this box will be the result of completing the breakdown table on page 16 bis of form 200 explained below.

This table must contain the amounts relating to the deductions on fixed assets generated in the tax periods 2010 to 2023, and the deductions included in Chapter IV of Title VI of the LIS insofar as they are equivalent to article 26 of Law 61/1978 generated in the tax periods 2005 to 2023, as detailed below:

  • Column "Joint limit" expresses the joint percentage that must operate on the total quota reduced by the deductions for double taxation and the bonuses ( box [00582] "Positive adjusted total quota" on page 14 of form 200), to determine the maximum amount applicable in the tax period subject to declaration.

    Keep in mind:

    The deductions for investments in fixed assets that come from previous tax periods that are pending application as of the tax period subject to declaration, will apply a single limit of 70 percent.

    With effect for tax periods beginning on or after 7 November 2018, on the islands of La Palma, La Gomera and El Hierro, this single limit of 70 per cent is raised to 80 per cent.

    As for the deductions included in Chapter IV of Title VI of the LIS, insofar as they are equivalent to article 26 of Law 61/1978 , they will apply the joint limit of 60 percent on the net quota of the tax period, which will be raised to 90 percent when the amount of the deductions provided for in articles 35 and 36 of the LIS, which corresponds to expenses and investments made in the tax period itself, exceeds 10 percent of said net quota.

    With effect for periods beginning on after 7 November 2018 on the islands of La Palma, La Gomera and El Hierro, the joint of percent will raised to percent .

  • Column "Year limit" indicates the last year in which the deduction may be applied, which will be the first of those indicated when the fiscal year coincides with the calendar year, provided that the fiscal year has a duration of twelve months.

  • In column "Pending/generated deduction" the amounts of the deductions for fixed assets and investments included in Chapter IV of Title VI of the LIS will be entered in the corresponding boxes, insofar as they are equivalent to article 26 of Law 61/1978, both from previous tax periods and the current tax period, and which are pending application at the beginning of the tax period that is the subject of the declaration.

    Rows “Fixed assets (Law 20/1991) 2023(*)” , “Investments in the Canary Islands (Law 20/1991) 2023(*)” and “Investments in La Palma, La Gomera and El Hierro (Law 20/1991) 2023(*)” , must only be completed if they are deductions pending application corresponding to a previous tax period starting in 2023.

  • In column "Applied in this settlement" the part (or the totality, if applicable) of the amounts recorded in the previous column "Deduction generated" relating to the deductions for investments made in the Canary Islands, which are applied in the settlement corresponding to the period subject to settlement, will be recorded.

    In box [00590] the total amounts entered in the column "Applied in this settlement" will be recorded, which must be transferred to box [00590] "Deductions in the Canary Islands" on page 14 bis of form 200 referring to the settlement of the Tax.

  • In column "Pending application in future periods" the positive difference between the amount of deductions pending at the beginning of the tax period or generated in said period in the column "Pending/generated deduction" and the amount of deductions applied in the settlement of the tax period subject to declaration in the column "Applied in this settlement" will be recorded. This amount will remain pending application in future tax periods, unless the tax period being declared is the last one in which the corresponding deduction can be applied, in which case the outstanding deduction balance would be lost.

    Keep in mind:

    The amounts not deducted may be applied , respecting the limits that apply to them, in the liquidations of the tax periods that conclude in the immediate and successive 15 years.

    However, the amounts corresponding to the deduction for research and development activities and technological innovation provided for in article 35 of the LIS, may be applied in the liquidations of the tax periods that conclude in the immediate and successive 18 years.

In addition to completing the abovementioned breakdown table, taxpayers must provide the following additional information to calculate the limits of deductions for investments in the Canary Islands:

  • In the box [02287] «2023: Deduction for research and development in the Canary Islands generated in the tax period» , the amount of the deduction for the performance of research and development activities generated in the year 2023 must be recorded.

  • In the box [02288] «2023: Deduction for technological innovation in the Canary Islands generated in the tax period» , the amount of the deduction for the performance of technological innovation activities generated in the year 2023 must be recorded.

  • In the box [02495] «2023 Producer: deduction for Spanish film productions in the Canary Islands generated in the tax period» , the amount of the deduction for investments in Spanish film productions generated by the producer in 2023 must be recorded.

  • In the box [02079] «2023: Funder: deduction for Spanish film productions in the Canary Islands generated in the tax period» , the amount of the deduction for investments in Spanish film productions generated by the producer in 2023 and applied by the taxpayer financing said productions must be recorded.

  • In the box [02496] «2023: Producer: deduction for live performing arts and musical shows in the Canary Islands generated in the tax period» , the amount of the deduction for investments in live performing arts and musical shows generated in the year 2023 must be recorded.

  • In the box [02080] «2023:  Funder: for live performing arts and musical shows in the Canary Islands generated in the tax period» , the amount of the deduction for investments in live performing arts and musical shows generated by the producer in 2023 and applied by the taxpayer who finances said productions must be recorded.