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Practical Manual for Companies 2023.

Scope of application of the specialities

The increased deduction percentages and other special provisions of article 94 of Law 20/1991 will only be applied to the new deduction system established in Chapter IV of Title VI of the LIS , where it is equivalent to the deduction system of article 26 of Law 61/1978, of December 27, on Corporate Tax.

The legal basis for this statement is as follows:

  1. Article 94.1 of Law 20/1991 , of June 7, establishes that increased percentages and deduction limits will apply to the General Deduction Regime of article 26 of Law 61/1978, of December 27, provided that the investments are made in the Canary Islands.

  2. The fourth transitional provision of Law 19/1994 , of July 6, modifying the Economic and Fiscal Regime of the Canary Islands, establishes in its first paragraph that in the event of the suppression of the General Regime of Deduction for Investments regulated by Law 61/1978, of December 27, its future application in the Canary Islands, as long as an equivalent substitute system is not established, will continue to be carried out in accordance with the regulations in force at the time of suppression.

  3. Article 26 of Law 61/1978, of December 27 was repealed by Law 43/1995, of December 27, on Corporate Tax, which introduced instead, the deductions to encourage the performance of certain activities in Chapter IV of Title VI (currently, these deductions are regulated in Chapter IV of Title VI of the LIS).