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Practical Manual for Companies 2023.

Special Economic and Tax Regime of the Canary Islands

With effect for tax periods beginning on or after 1 January 2023, Law 31/2022, of 23 December, introduces the following modifications in relation to the special regime of the Canary Islands Special Zone (hereinafter, ZEC):

  • In letter c) of article 42.1 of Law 19/1994 it is established for taxpayers who carry out the trade operations of goods referred to in letter a) (ii) of section 1 of article 44 of said Law, the obligation to subscribe quarterly informative declaration of operations with goods carried out outside the ZEC where the origin and destination of the goods, the type of goods, quantity and other required information will be stated, in accordance with the customs code of the Union and other applicable regulations . They must also keep record of the corresponding customs documentation.

    For these purposes, Order HFP/1285/2023, of November 28, approves the new model 281 "Quarterly informative declaration of tangible goods trade operations carried out in the ZEC without the goods transiting through Canary Islands territory" which must be submitted quarterly by those required to declare. Furthermore, this Order regulates the content, term and formal requirements of the "Record book of trade operations of tangible goods carried out in the ZEC without the goods transiting through Canary Islands territory."

  • Article 44 of Law 19/1994 is to determine the portion of the ZEC entity's tax base that, for the purposes of applying the special tax rate, is derived from operations carried out materially and effectively within the geographic of the ZEC.

  • Article 50 bis is added to Regulations for the development of Law 19/1994 , approved by Royal Decree 1758/2007, of December 28, to establish in relation to the determination of the part of the tax base corresponding to operations carried out effectively and materially in the geographical area of the ZEC in which cases it is considered that aircraft contribute to improving the connections of the Canary Islands.