B. Provisions to the reserve

Regulation:  DA 70. Four.2 Law 31/2022

The reduction will be applied to the contributions that in each tax period are made to the reserve for investments up to the limit of 90 percent of the part of profit obtained in the same period that is not subject to distribution, as long as it comes from establishments located in the Balearic Islands.

The application of the reduction cannot determine that the tax base is negative.

For these purposes, profits from establishments in the Balearic Islands will be considered as those derived from economic activities, including those from the transmission of the assets related to them.

undistributed benefits will be considered as those intended to nourish the reserves, excluding those of a legal nature.

Undistributed profit will not be considered if it derives from the transmission of assets whose acquisition would have determined the materialization of the reserve for investments regulated in this section, nor from that derived from the securities representing participation in the capital or own funds of other entities, as well as the transfer of own capital to third parties.

Allocations to reserves will be considered reduced by the amount that would eventually have been deducted from own funds, either in the year to which the reduction in the tax base refers or in which it is adopt the agreement to carry out the aforementioned assignments.