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Practical Manual for Companies 2023.

2. Special regime for industrial, agricultural, livestock and fishing companies

Regulation:  DA 70. Five Law 31/2022

Corporate Tax payers will apply a bonus of 10 percent of the full rate corresponding to the income derived from the sale of tangible goods produced in the Balearic Islands by themselves, typical of agricultural, livestock, industrial and fishing activities, in the latter case in relation to catches made in their fishing and aquaculture area.

This bonus will not be applicable to income derived from the sale of tangible goods produced in the Balearic Islands related to shipbuilding, synthetic fibres, the automobile industry, steel industry and coal industry activities. 

a. Requirements 

You can apply this bonus in each tax period:

  • Entities domiciled in the Balearic Islands or in other territories that are dedicated to the production of such goods in the archipelago, through a branch or permanent establishment.

  • Whose average workforce in said period is not less than the average workforce corresponding to the twelve months prior to the start of the first tax period in which this special regime takes effect.

    When the entity has been established within the aforementioned period of twelve months, the average workforce resulting from that period will be taken into account.

    For the calculation of the average workforce of the entity, the employed persons will be taken, in accordance with the terms established by labor legislation, taking into account the contracted working day in relation to the full working day.

    Compliance with the requirement of maintaining employment in successive tax periods will refer to the average workforce of the entity's first tax period.

  • When the entity has been established in the first tax period in which this special regime takes effect, the application of the bonus will require that said entity meets the requirements for the reduced tax rate to be applied for newly created entities regulated in article 29.1 of the LIS. In this case, compliance with the requirement of maintaining employment in successive tax periods will refer to the average workforce of the entity's first tax period.

b. Increased bonus

This bonus will be increased up to 25 percent in those tax periods in which, in addition to meeting the average workforce requirement provided for in the previous section, there has been an increase in the average workforce of no less than one with respect to the average workforce of the previous tax period and said increase is maintained for at least a period of three years from the end date of the tax period in which this increased bonus is applied.

In the event that entity is established in the first tax period in which this special regime takes effect, the application of the bonus will require that said entity meets the requirements for the reduced tax rate to be applicable for newly created entities regulated in article 29.1 of the LIS. For these purposes, the average workforce of the entity prior to the entity's first tax period will be considered to be zero.

c. Filling in form 200

Corporate Taxpayers who are entitled to apply this bonus must first tick box [00086] "Special regime for the Balearic Islands" on page 1 of Form 200.

Next, they must enter the bonus amount in box [00815] "Bonus on income from sales of tangible assets produced in the Balearic Islands (DA 70.Five Law 31/2022)" on page 14 of form 200.