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Practical Handbook for Companies 2025.

C. Requirements

Regulation: Article 27.3, 4, 5, 7 and 8 Law 19/1994

  1. The investment reserve must appear on the balance sheets with absolute separation and appropriate title and will be unavailable as long as the assets in which it was materialized must remain in the company.

    Keep in mind:

    The joint interpretation of sections 3, 16 and 17 of article 27 of Law 19/1994 implies that the provision of the reserve for investments previously Upon completion of the investment maintenance period, the taxpayer will be required to proceed to integration in the taxable base of the Corporate Income Tax of the amounts that at the time gave rise to the reduction in the taxable base. Therefore, the accounting allocation of the reserve, as well as its unavailability, and therefore its existence on the balance sheet, until the maintenance period ends It is a key condition to be able to enjoy this tax benefit. For these purposes, maintain the reserve on balance sheet not separated from other reserves or maintain the reserve in balance without being properly identified constitutes the objective element of the serious tax offense provided for in article 27.17.a) of Law 19/1994.

    (Resolution TEAC No. 00/09105/2024/00/00, dated February 19, 2026).

  2. The amounts allocated to the RIC they must to materialize within a maximum period of 3 years, counted from the date of accrual of the tax corresponding to the year in which it has been endowed, in the performance of one of the following investments which, by way of summary, are detailed below:

    1. Article 27.4 A)

      Initial investments consisting of the acquisition of new tangible or intangible fixed assets as a result of:

      • The creation of an establishment.

      • The expansion of an establishment.

      • The diversification of an establishment's activity for the production of new products.

      • The substantial transformation in the production process of an establishment.

      Likewise, will be considered initial investments in land, built or not, provided that they have not previously benefited from the reserve regime and the following are affected:

      • To the promotion of protected housing, when this classification is appropriate in accordance with the provisions of Decree 27/2006, of March 7, which regulates the actions of the Canary Islands Housing Plan, and are intended for rental, even when a public body, entity or organization intervenes in the effective formalization of the rental by acting as an intermediary between the taxpayer and the actual tenant.

      • To the rehabilitation of protected housing, in accordance with the provisions of Law 2/2003, of January 30, on Housing in the Canary Islands, intended for rental in favor of persons registered in the Public Registry of Applicants for Protected Housing in the Canary Islands, in accordance with the provisions of the Order of September 24, 2009, which regulates the registration, operation and structure of said Registry.

      • For the development of industrial activities included in divisions 1 to 4 of the first section of the rates of the Tax on Economic Activities, approved by Royal Legislative Decree 1175/1990, of September 28, which approves the rates and instructions of the Tax on Economic Activities.

      • To social-health activities, residential centers for the elderly, geriatric centers and neurological and physical rehabilitation centers.

      • To commercial areas that are subject to a rehabilitation process.

      • For tourist activities regulated by Law 7/1995, of April 6, on the Regulation of Tourism in the Canary Islands, the acquisition of which has the purpose of rehabilitating a tourist establishment.

      For the sole purpose of understanding that the value corresponding to the land is included in the amount of the materialization of the Reserve, Rehabilitation works will be considered Actions aimed at renovation, expansion or improvement, provided they meet the necessary conditions to be incorporated into tangible fixed assets as an increase in the value of the property.

      Under no circumstances it will be possible to materialize the reserve for investments in the Canary Islands in the acquisition of real estate intended for holiday home, as this non-hotel accommodation modality is regulated in Decree 142/2010, of October 4, and in Decree 113/2015, of May 22.

    2. Article 27.4 B)

      The creation of jobs directly related to the investments planned in letter A above , which occurs within a period of six months from the date of entry into operation of said investment, with the requirements developed in this provision.

    3. Article 27.4 B) bis

      The creation of jobs carried out in the tax period that cannot be considered as initial investment because it does not meet any of the requirements established in letter B above, with a limit of 50 percent of the allocations to the Reserve made by the taxpayer in the tax period.

    4. Article 27.4 C)

      The acquisition of tangible or intangible fixed assets that cannot be considered as an initial investment because they do not meet any of the conditions established in letter A above, the investment in assets that contribute to the improvement and protection of the environment in the Canary Islands, as well as those research and development expenses that are determined by regulation.

      In the case of passenger transport vehicles by sea or road, they must be used exclusively for public services within the scope of functions of general interest that correspond to the public needs of the Canary Islands.

      In the case of floorWhether built or not, it must be affected:

      • To the promotion of protected housing, when this classification is appropriate in accordance with the provisions of Decree 27/2006, of March 7, which regulates the actions of the Canary Islands Housing Plan, intended for rental, even when a public body, entity or organization intervenes in the effective formalization of the rental by acting as an intermediary between the taxpayer and the actual tenant.

      • To the rehabilitation of protected housing, in accordance with the provisions of Law 2/2003, of January 30, on Housing in the Canary Islands, intended for rental in favor of persons registered in the Public Registry of Applicants for Protected Housing in the Canary Islands, in accordance with the provisions of the Order of September 24, 2009, which regulates the registration, operation and structure of said Registry.

      • For the development of industrial activities included in divisions 1 to 4 of the first section of the rates of the Tax on Economic Activities, approved by Royal Legislative Decree 1175/1990, of September 28, which approves the rates and instructions of the Tax on Economic Activities.

      • To social-health activities, residential centers for the elderly, geriatric centers and neurological and physical rehabilitation centers.

      • To commercial areas that are subject to a rehabilitation process.

      • For tourist activities regulated by Law 7/1995, of April 6, on the Regulation of Tourism in the Canary Islands, the acquisition of which has the purpose of rehabilitating a tourist establishment.

      For the sole purpose of understanding the value corresponding to the land to be included in the amount of the materialization of the Reserve, rehabilitation works will be considered to be actions aimed at the renovation, expansion or improvement of tourist establishments, provided that they meet the necessary conditions to be incorporated into tangible fixed assets as a higher value of the property.

      Under no circumstances it will be possible to materialize the reserve for investments in the Canary Islands in the acquisition of real estate intended for holiday home, as this non-hotel accommodation modality is regulated in Decree 142/2010, of October 4, and in Decree 113/2015, of May 22.

    5. Article 27.4 D)

      Subscription of:

      • 1. Shares or interests in the capital issued by companies as a result of their incorporation or capital increase that carry out their activity in the archipelago, provided that the requirements set forth in this legal provision are met.

      • 2. Shares or interests in the capital issued by entities of the Canary Islands Special Zone as a result of their incorporation or capital increase, provided that the requirements and conditions established in the previous indent of this letter D and those provided for in Chapter I of Title V of Law 19/1994 are met, provided that they meet the conditions developed in this legal provision.

      • 3. Any financial instrument issued by financial entities provided that the funds raised for the purpose of establishing the Reserve are used to finance private or public-private partnership projects in the Canary Islands, whose investments are eligible in accordance with the provisions of this article, provided that the issues are supervised by the Government of the Canary Islands, and have a binding report from the State Tax Administration Agency, under the terms established by regulation.

      • 4. Public debt securities of the Autonomous Community of the Canary Islands, the Canary Islands Local Corporations or their public companies or autonomous bodies, provided that it is used to finance investments in infrastructure and equipment or of improvement and protection of the environment in the Canary Islands, oa finance the promotion of subsidized housing intended for rental, or for the rehabilitation of protected housing intended for rental in favor of persons registered in the Public Register of Applicants for Protected Housing of the Canary Islands, in accordance with the provisions of the Order of September 24, 2009, with the 50 percent limit of the allocations made in each fiscal year.

      • 5. Securities issued by public bodies that proceed to the construction or operation of infrastructure or facilities of public interest or the rehabilitation of protected housing intended for rental to persons registered in the Public Register of Applicants for Protected Housing of the Canary Islands, in accordance with the provisions of the Order of September 24, 2009, for public administrations in the Canary Islands, when the financing obtained with said issue is exclusively allocated to such construction or operation, with the 50 percent limit of the allocations made in each fiscal year.

      • 6. Securities issued by entities that carry out the construction or operation of infrastructure or equipment of public interest for public administrations in the Canary Islands, once the corresponding administrative concession or enabling administrative title has been obtained, when the financing obtained from said issue is exclusively intended for such construction or operation, with a limit of 50 percent of the provisions made in each financial year and under the terms provided for by regulation. The issue of the corresponding securities shall be subject to prior administrative authorization by the competent Administration for granting the corresponding enabling administrative title.

  3. The assets in which the investment is materialized must be located or received in the Canary Islands, used therein, affected and necessary for the development of the taxpayer's economic activities, except in the case of those that contribute to the improvement and protection of the environment in the Canary Islands.

    For these purposes, the following are understood located and used in the archipelago:

    1. Aircraft that, due to their destination, contribute to improving the connections of the Canary Islands, under the terms that are determined by regulation.

    2. Ships flying the Spanish flag and based in the Canary Islands, including those registered in the Special Register of Ships and Shipping Companies.

    3. The transport and communications networks that connect the Canary archipelago with the outside world, for the section of it that is within the territory of the Canary Islands and the part located outside of it that is used to connect the different islands of the archipelago with each other.

    4. Computer applications and industrial property rights, which are not mere distinctive signs of the taxpayer or their products, and which are to be applied exclusively in production processes or commercial activities that are developed in the territorial scope of the Canary Islands, as well as intellectual property rights that are subject to reproduction and distribution exclusively in the Canary Islands archipelago.

    5. Intellectual property rights, insofar as they have been created with the entity's resources located in the Canary Islands territory or acquired from third parties for their transformation, provided that their economic exploitation is directed, carried out, contracted, distributed, organized and invoiced from the aforementioned area.

    6. Administrative concessions for the use of public domain assets located in the Canary Islands.

    7. Administrative concessions for the provision of public services that are carried out exclusively within the archipelago.

    8. Administrative concessions for public works for the execution or operation of public infrastructure located in the Canary Islands.

  4. Materialization will be deemed to have occurred, even in cases of acquisition through financial leasing, at the time when the assets come into operation.

  5. The assets in which the investment reserve referred to in letters A and C of article 27.4 of Law 19/1994 has been materialized, as well as those acquired pursuant to the provisions of letter D of that same section, must remain in operation in the acquirer's company for at least five years, without being transferred, leased or assigned to third parties for their use. When its permanence is less than said period, this requirement will not be considered breached when another asset is acquired to replace it at its net book value, prior to or within 6 months of its removal from the balance sheet, which meets the requirements for the application of the reduction provided for in this article and which remains in operation for the time necessary to complete said period.  In the case of the acquisition of land , the term will be ten years.

    In the event of loss of the asset it must be replaced under the terms set out in the previous paragraph.

    Taxpayers engaged in the economic activity of leasing or transferring to third parties for their use fixed assets may benefit from the investment reserve regime, provided that there is no direct or indirect link with the lessees or assignees of said assets, in the terms defined in article 18.2 of the LIS , nor are they financial leasing operations. 

    For these purposes, it shall be understood that the real estate leasing It is carried out as an economic activity only when the circumstances provided for in article 27.2 of the Law of PIT.

    However, when it comes to the rental of protected housing by the promoting company and a public body, entity or agency intervenes in the formalization and effective management of the lease by acting as an intermediary between the taxpayer and the actual lessee, said lease will in any case be considered economic activity when the taxpayer has a person employed under a full-time employment contract for said operation.

    In the cases of real estate lease, In addition to the conditions set out in the previous paragraph, the taxpayer must be considered a tourist company in accordance with the provisions of Law 7/1995, of April 6, on the Regulation of Tourism in the Canary Islands, and the rental of protected housing must be involved. of the leasing of rehabilitated protected housing in favor of persons registered in the Public Registry of Applicants for Protected Housing of the Canary Islands, in accordance with the provisions of the Order of September 24, 2009, of real estate affected by the development of industrial activities included in divisions 1 to 4 of section one of the rates of the Tax on Economic Activities, approved by Royal Legislative Decree 1175/1990, of September 28, which approves the rates and instructions of the Tax on Economic Activities, or of commercial areas located in areas whose tourist offer is in decline, because they require integrated interventions for the rehabilitation of urban areas, according to the terms defined in the general planning guidelines of the Canary Islands, approved by Law 19/2003, of April 14.

  6. The investments in which the reserve is materialized may be financed through financial leasing contracts , in which case the reduction in the tax base will be conditional on the effective exercise of the purchase option.

Investments in assets related to the housing rental activity

Regulation: DA15 Law 19/1994

With effect for tax periods beginning on or after January 1, 2025, the implementation of the RIC through investments in assets related to the housing rental activity, provided that the maximum materialization period of three years provided for in article 27.4 of Law 19/1994 is met.

For these purposes, it will in any case be considered economic activity of housing rental that operation for whose development there is a person employed with a full-time employment contract.

The main ones characteristics These investments are as follows:

  1. Regarding the initial investments The amounts allocated to the RIC, as referred to in Article 27.4 of Law 19/1994, may be materialized in real estate located in the Canary Islands, provided that they are used in a novel way for housing rental, with or without an option to purchase, and there is no direct or indirect link with the tenant in the terms defined in Article 18.2 of the LIS.

    For these purposes, housing will be understood as the building or part of it, of a private nature, intended for the residence and habitation of people, when it is used for that purpose in an effective, continuous and stable manner by the tenant, constituting his habitual residence. Those excluded by Article 5 of Law 29/1994, of November 24, on Urban Leases, will not be considered residential leases.

    Likewise, it will be understood that the rental of housing takes place from novel form when the property acquired had not been transferred under said regime within the year prior to the date of acquisition.

    It will be essential requirement for the proper materialization of the reservation, the dwelling must be effectively rented within the period of 6 months subsequent to the date of its acquisition or its being made habitable. If the dwelling has been made habitable after the acquisition of the property, the date of this urban planning situation must be proven by providing the administrative documents that justify the first occupancy, in accordance with the provisions of the current legislation on planning and quality of the building.

    It will be understood that the dwelling is located effectively leased from the date stated in the lease agreement. In order to prove this date, proof of effective collection of the amounts due from the landlord upon signing the contract must be provided, including, in any case, the amounts corresponding to the payment of the first two monthly installments.

    In the event that fail to comply the deadline 6 months intended for the effective rental of housing, The amounts that gave rise to the RIC must be included in the taxable base of the Corporate Income Tax for the year in which the non-compliance occurs, without prejudice to any applicable penalties.

    Taxpayers who do not comply the requirements of the small entities established in article 101 of the LISIn the tax period in which the profit is obtained from which the reserve is funded, the reserve may only be materialized through investment in used properties intended for housing rental if they have not previously benefited from the regime provided for in this provision, the general regime regulated in Article 27 of Law 19/1994, or the deduction regime for investments in the Canary Islands.

  2. Also materialization is permitted through:

    • The realization of investments indicated in the previous section when cannot be considered initial investments because it has not been carried out as a result of the creation or expansion of an establishment, or the diversification or substantial transformation of production, provided that the assets are affected by the development of the housing rental activity defined in the previous points.

    • Making investments in job creation directly related to the investments provided for in this provision, provided that the conditions established in letters B or B bis of article 27.4 of Law 19/1994 are met.

    • The subscription of shares or equity interests in the capital issued by companies as a result of their incorporation or capital increase that carry out their activity in the archipelago, when such entities make investments related to the development of housing rental under the terms provided for in the Fifteenth Additional Provision and in letter D 1.º of article 27.4 of Law 19/1994.

  3. To determine the materialization amountthe provisions of the Article 27.6 of Law 19/1994.

  4. The calculation of period of operation of the investment It will begin to be counted at the start of the effective lease. However, the transfer will not be considered interrupted when a new lease of the same dwelling is carried out within six months of its vacancy, but in this case, the period of maintenance of the investment will be extended for a period equivalent to that during which the property has been unoccupied.

  5. In everything not expressly regulated In the fifteenth Additional Provision of Law 19/1994, the regulation of the RIC provided for in article 27 of said Law shall be applied. In particular, the incompatibility regime provided for in Article 27.12 of Law 19/1994 will apply.