By investment in agricultural companies

Regulations: Art. 13 ter.Two Revised Text of the legal provisions of the Autonomous Community of Galicia on taxes transferred by the State, approved by Legislative Decree 1/2011, of July 28

Requirements for applying the deduction

• That the assets or rights of economic content computed for the determination of the tax base are:

  1. Share capital of:

     1. Forestry development companies regulated by Law 7/2012, of June 28, on forests in Galicia.

     2. Agricultural entities, agricultural cooperatives or community land exploitation entities whose exclusive purpose is agricultural activities.

     3. Entities whose purpose is the mobilization or recovery of agricultural land in Galicia, under the instruments provided for in Law 11/2021, of May 14, on the recovery of agricultural land in Galicia.

  2. Loans made in favor of the same entities mentioned in letter a) above, as well as guarantees that the taxpayer personally constitutes in favor of these entities.

  3. Shares of capital partners in joint accounts established for the development of agricultural activities and in which the managing partner is one of the entities mentioned in letter a) above.

• Investments to which the deduction is applicable must formalized in public deed, which must specify the identity of the taxpayers who intend to apply this deduction and the amount of the respective transaction.

• The investments made must be kept in the taxpayer's assets for minimum period of five years, counted from the day following the date on which the transaction is formalized in public deed. In the case of financing operations, the maturity period must be greater than or equal to five years, without being able to amortize an amount greater than 20% per year of the principal amount. The guarantees established must be maintained during the same five-year period.

Amount of deduction

• 100% of the portion of the share that proportionally corresponds to the aforementioned assets or rights.

• In the case of shares in the share capital of entities [section a) of the assets or rights of economic content indicated in the previous section], the deduction will only apply to the value of these, determined according to the rules of this tax, in the part that corresponds to the proportion existing between the assets necessary for the exercise of the agricultural activity, reduced by the amount of the debts derived from it, and the value of the net assets of the entity. To determine this proportion, the value deduced from the accounting will be taken, provided that it faithfully reflects the true financial situation of the entity.

• In the case of loans or participations in joint accounts [sections b) and c) of the assets or rights of economic content indicated in the previous section], the deduction will only be applied to the amount that finances the agricultural activity of the entity, understanding that they finance this activity in the part that results from applying to its total amount the proportion determined in accordance with the provisions of the previous paragraph.

Incompatibility

This deduction will be incompatible with the application to the same assets or rights of the exemptions of article 4 of the Wealth Tax Law, even if said exemption is partial.

This deduction is also incompatible with the deduction " For the creation of new companies or expansion of the activity of recently created companies "