Skip to main content
Practical Manual for Companies 2023.

Special cases

  1. Article of Law 20/1991, of June that companies and other legal entities subject to Corporation Tax, with a tax domicile in the Canary Islands, may, from the first financial year closed after December 31 1991, and in relation to made and remaining in the Archipelago deduction regime provided for in article of Law 61/1978, of December , on Corporation Tax, in with the following peculiarities

    1. applicable on investments made will be 80 percent higher than those of the general regime, with a minimum differential of 20 percentage points.

    2. Deduction for investment in the Canary Islands, will have as maximum limit the percentage indicated below of the net quota resulting from reducing the full quota by the amount of the deductions for double taxation and, where applicable, the bonuses provided for in article 25 of Law 61/1978, of December 27, on Corporate Tax. This percentage will always be 80 percent higher than that set for each modification of the deduction for investments in the general regime, with a minimum differential of 35 percentage points. However, on the islands of La Palma, La Gomera and El Hierro, the minimum limit of 80 percent will be increased to 100 percent and the minimum differential will increase to 45 percentage points when the Community regulations on state aid so permit and it concerns investments contemplated in Law 2/2016, of September 27 and other laws on measures for the regulation of the economic activity of these islands.

  2. On the other hand, article 94.2 of Law 20/1991 establishes that the Deduction Regime for Investments of this article will also apply to companies and other legal entities that do not have their tax domicile in the Canary Islands , with respect to permanent establishments located in this territory and provided that the corresponding investments are made and remain in the Archipelago.

    In these cases, the maximum deduction limit on the net quota referred to in article 94.1.b) of Law 20/1991, will be applied independently of that corresponding to the investments under the general regime.

    This same criterion will also apply to the investments made in mainland Spain or the Balearic Islands , through permanent establishments, by the entities domiciled in the Canary Islands.