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Practical Handbook for Companies 2025.

Investment deductions in the Canary Islands with increased limits (pages 16 bis and 16 ter of form 200)

Entities that are entitled to apply deductions for investments made in the Canary Islands under the terms set out in the previous sections will record their amount in box [00590] "Canary Islands Investment Deductions" on page 14 bis of form 200. The amount entered in this box will be the amount resulting from completing the breakdown table of the pages 16 bis and 16 ter of model 200 which is explained below.

This table should show the amounts relating to deductions on fixed assets generated in the tax periods 2010 to 2025, and the deductions included in Chapter IV of Title VI of the LIS provided they are equivalent to Article 26 of Law 61/1978 generated in the tax periods 2007 to 2025, in the manner detailed below:

  • The column «Limit/Joint Limit» expresses the percentages that must operate on the full quota reduced by deductions for double taxation and bonuses (box [00582] "Positive adjusted total quota" on page 14 of form 200), to determine the maximum amount applicable in the tax period being declared.

    Keep in mind:

    • The deduction for investments in new fixed assets in the Canary Islands for the tax period subject to declaration is subject to a joint limit of 70 percent of the net amount, taking into account the following interpretative criterion: issued by the Supreme Court in several rulings (among them, theSTS3486/2005 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, 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 Deductions are only allowed for investments from previous tax periodsEach of them will have its own limit, established by its respective rules, there being no legal prohibition that prevents the sum of the limits from absorbing 100 percent of the net quota, as established by the Supreme Court in the sixth legal basis of STS 744/2009, of January 29, 2009.

      With effects for tax periods beginning on or after November 7, 2018, in the islands of La Palma, La Gomera and El Hierro, This joint limit of 70 percent is raised to 80 percent.

    • Regarding the deductions included in Chapter IV of Title VI of the LIS as long as they are equivalents with the Article 26 of Law 61/1978, will apply the joint limit of 60 percent on the net amount for the tax period, which It will rise to 90 percent when the amount of the deductions provided for in Articles 35 and 36 of the LIS, corresponding to expenses and investments made in the tax period itself, exceeds 10 percent of said net tax liability.

      With effect for periods beginning on after 7 November 2018 on the islands of La Palma, La Gomera and El Hierro, the joint of percent will raised to percent .

  • Column "Year limit" indicates the last year in which the deduction may be applied, which will be the first of those indicated when the fiscal year coincides with the calendar year, provided that the fiscal year has a duration of twelve months.

  • In column "Pending/generated deduction" the amounts of the deductions for fixed assets and investments included in Chapter IV of Title VI of the LIS will be entered in the corresponding boxes, insofar as they are equivalent to article 26 of Law 61/1978, both from previous tax periods and the current tax period, and which are pending application at the beginning of the tax period that is the subject of the declaration.

    The rows «Fixed assets (Law 20/1991) 2025(*)», «Investments in the Canary Islands (Law 20/1991) 2025(*)» and «Investments in La Palma, La Gomera and El Hierro (Law 20/1991) 2025(*)»They should only be completed if they are deductions pending application corresponding to a previous tax period starting in 2025.

  • In column "Applied in this settlement" the part (or the totality, if applicable) of the amounts recorded in the previous column "Deduction generated" relating to the deductions for investments made in the Canary Islands, which are applied in the settlement corresponding to the period subject to settlement, will be recorded.

    In box [00590] the total amounts entered in the column "Applied in this settlement" will be recorded, which must be transferred to box [00590] "Deductions in the Canary Islands" on page 14 bis of form 200 referring to the settlement of the Tax.

  • In column "Pending application in future periods" the positive difference between the amount of deductions pending at the beginning of the tax period or generated in said period in the column "Pending/generated deduction" and the amount of deductions applied in the settlement of the tax period subject to declaration in the column "Applied in this settlement" will be recorded. This amount will remain pending application in future tax periods, unless the tax period being declared is the last one in which the corresponding deduction can be applied, in which case the outstanding deduction balance would be lost.

    Keep in mind:

    The amounts not deducted may be applied , respecting the limits that apply to them, in the liquidations of the tax periods that conclude in the immediate and successive 15 years.

    However, the amounts corresponding to the deduction for research and development activities and technological innovation provided for in article 35 of the LIS, may be applied in the liquidations of the tax periods that conclude in the immediate and successive 18 years.

In addition to completing the abovementioned breakdown table, taxpayers must provide the following additional information to calculate the limits of deductions for investments in the Canary Islands:

  • In the box [02287] «2025: Deduction for research and development in the Canary Islands generated in the tax period»The amount of the deduction for carrying out research and development activities generated in the year 2025 must be entered.

  • In the box [02288] «2025: Deduction for technological innovation in the Canary Islands generated in the tax period»The amount of the deduction for carrying out technological innovation activities generated in the year 2025 must be entered.

  • In the box [02495] «2025 Producer: deduction for Spanish film productions in the Canary Islands generated in the tax period», the amount of the deduction for investments in Spanish film productions generated by the producer in the year 2025 must be entered.

  • In thebox [02079] «2025: Funder: deduction for Spanish film productions in the Canary Islands generated in the tax period», the amount of the deduction for investments in Spanish film productions generated by the producer in 2025 and applied by the taxpayer who finances said productions must be entered.

  • In the box [02496] «2025: Producer: deduction for live performing arts and musical shows in the Canary Islands generated in the tax period», the amount of the deduction for investments in live performing arts and musical shows generated in the year 2025 must be entered.

  • In the box [02080] «2025: Funder: for live performing arts and musical shows in the Canary Islands generated during the tax period»The amount of the deduction for investments in live performing arts and musical shows generated by the producer in 2025 and applied by the taxpayer who finances said productions must be entered.