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Practical Manual for Companies 2024.

Summary table of the types of deduction for investments in the Canary Islands

Deduction modalities Percentages of
deduction		 Joint limit
Research and development expenses (art. 35.1 LIS ) 45/75.6/28 per 100
37 per 100 (additional)		 60/90%
70/100
(La Palma, La Gomera and
El Hierro from 7/11/2018)
Technological innovation expenses (art. 35.2 LIS) 45 percent
Spanish film productions (art. 36.1 LIS) (1) 54/45 percent
Production and exhibition of live shows of performing and musical arts (art. 36.3 LIS) (2) 40 percent
Job creation for workers with disabilities (art. 38 LIS)
11,700/15,600 euros
(as of 11/7/2018)
Foreign film productions (art. 36.2 LIS) (3)

54/45 percent
54 percent

 Excluded from the joint limit
Investments in West African territories and advertising and publicity expenses (art. 27 bis Law 19/1994) 15/10 percent 25/50 per 100
Investments in fixed assets (4) 25 percent

70%
80%
(La Palma, La Gomera and
El Hierro from 7/11/2018)

Notes to the table:

(1)  With effect for tax periods beginning on or after 1 January 2023, the amount of this deduction may not exceed 36 million euros , when it concerns productions made in the Canary Islands. In the case of audiovisual series , the deduction will be determined per episode and the maximum deduction amount will be 18 million euros . (Back)

(2) With effect for tax periods beginning on or after 1 January 2021 , the amount of this deduction may not exceed 900,000 euros , when it concerns expenses incurred in the Canary Islands. (Back)

(3) With effect for tax periods beginning on or after 1 January 2023, the amount of this deduction may not exceed 36 million euros, when it concerns expenses incurred in the Canary Islands. In the case of audiovisual series , the deduction will be determined per episode and the maximum deduction amount will be 18 million euros . In relation to the minimum expenditure amount set by letter a) of article 36.2 of the LIS, the expenses incurred in the Canary Islands for animation of a foreign production must be greater than 200,000 euros . Regarding the execution of visual effects services , the provisions of letter b) of article 36.2 of the LIS will apply. (Back)

(4) In relation to this joint limit the following must be taken into accountinterpretive criterionissued by theSupreme Courtin several Judgments (among them,STS3486/2005 and STS 744/2009):

  • He joint limit only applies in the case that deductions from previous tax periods are present together with the deductions from the tax period being declared as follows:

    • First of all, the following will be taken into account: deductions for investments from previous tax periods which will be subject to the limit on the net quota established in their respective standards, with the accumulation of limits proceeding when several deductions from previous tax periods occur.

    • In second place, if the limit of previous tax periods is higher than the joint limit and if said joint limit is fully absorbed by investments from previous tax periods, the deduction that may correspond to the tax period being declared cannot be applied. On the contrary, if it were lower, the deduction may be made for investments in the tax period being declared up to the limit resulting from the difference between the limit for deductions from previous tax periods and the joint limit.

  • If in the period subject to declaration There are only deductions for investments from previous tax periods, Each of them will have its own limit, and there is no legal prohibition against the sum of all limits absorbing 100 percent of the net quota.

(Back)