Tax benefits in the Canary Islands
If you are resident in the Canary Islands, you should read this
Canary Islands Special Zone
The validity of the Canary Islands Special Zone will be limited to December 31, 2026, extendable with prior authorization from the European Commission. However, the authorization of registration in the Official Registry of Entities of the Canary Islands Special Zone will have a limit of December 31, 2020.
The geographical scope of the Canary Islands Special Zone will extend to the entire territory of the Canary Islands.
Newly created legal entities and branches that, meeting the legally established requirements, are registered in the Official Registry of Entities of the Canary Islands Special Zone can benefit from the Canary Islands Special Zone regime.
Only those legal entities and branches that meet the following requirements will be registered:
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That they have their registered office and effective management headquarters within the geographical scope of the ZEC.
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That at least one administrator or, in the case of branches, a legal representative resides in the Canary Islands.
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Establish its corporate purpose to carry out economic activities included in the annex to Law 19/1994 in the geographical area of the ZEC. Likewise, through a separate branch, they may carry out other activities to which the benefits of the ZEC will not apply, in which case they must maintain separate accounting.
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Make investments in the first two years from its registration, which materialize in the acquisition of property elements of tangible or intangible assets, located or received in the geographical scope of the ZEC, used therein, affected and necessary for the development of the economic activities carried out by the taxpayer in said geographical area, complying with the conditions and for the minimum amount indicated in article 31 of Law 19/1994.
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The creation of jobs in the geographical scope of the ZEC within six months following its registration and the maintenance of at least that number of the average annual workforce during the period of enjoyment of this regime, with a legally established minimum.
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Present a descriptive report of the main economic activities to be developed, which endorses their solvency, viability, international competitiveness and their contribution to the economic and social development of the Canary Islands, the content of which will be binding for the entity, except for changes in these activities prior express authorization. of the Governing Council.
The registration of an entity in the Official Registry of Entities of the ZEC is conditional on the prior authorization of the ZEC Consortium.
For these purposes, an application must be submitted, accompanied by a descriptive report of the main economic activities referred to in article 31.2.f) of Law 19/1994. Along with this application, a deposit or guarantee will be provided in the amount of the registration fee regulated in article 50.
In view of the documentation provided, the Governing Council will proceed with the authorization, following a favorable report from the Technical Commission.
Authorization by the Governing Council must be granted, expressly, within a period of 2 months, counting from the date of receipt of the application in the ZEC Consortium. If this period has elapsed without an express resolution, the request for authorization will be deemed to have been rejected.
Once the authorization is obtained, the applicant must provide the Official Registry of Entities of the ZEC with the documents accrediting the constitution of the entity in accordance with the Law.
Registration must be carried out within 10 days, counting from the day on which the documents referred to in the preceding paragraph are presented.
ZEC entities will pay Corporate Tax with the following specialties:
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They will apply the special tax rate of 4% to that part of the tax base that corresponds to the operations carried out materially and effectively in the geographical scope of the ZEC.
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The ZEC entities will keep their accounting in accordance with the provisions of the Commercial Code and other accounting regulations that apply to them, without prejudice to the following specialties:
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They must individualize in separate accounts the operations that must appear, with a positive and negative sign, in the numerator of the fraction by which the percentage that will be applied to the tax base is calculated to determine the part that will be taxed at the special rate.
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The differentiated branches to which the benefits of the ZEC do not apply must keep accounting separate from the accounting of the ZEC entity.
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A breakdown of the part of the profit and loss account, as well as all those accounts that reflect application of the profit, that comes from operations carried out effectively and materially in the geographical scope of the ZEC must be included in the report.
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Taxpayers who carry out the operations of trade in goods referred to in letter a) of section 1 of article 44 of Law 19/1994, must subscribe quarterly an informative declaration of operations with goods carried out outside the Canary Islands Special Zone where The origin and destination of the goods, the type of goods, quantity and other required information will be recorded, in accordance with the Union customs code and other applicable regulations. They must also keep a record of the corresponding customs documentation.
The special tax rate applicable to that part of the tax base that corresponds to the operations that are materially and effectively carried out in the geographical scope of the ZEC will be 4%.
In the numerator , with positive sign , the amount of the following operations:
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Transmissions of tangible movable property carried out within the geographical scope of the ZEC.
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Transfers of real estate that form part of the fixed assets assigned to the activity, including real rights over them, when the assets are located in the geographical area of the ZEC.
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The provision of services carried out with the means of the entity that are located within the scope of the ZEC.
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Operations carried out from the activity centers of the entity located in the geographic scope of the ZEC destined for its branches located outside said geographic scope, when they have been used by the branch for the delivery of goods or the provision of services to third parties.
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The transfer of rights to use or exploit computer applications, industrial property rights that are not mere distinctive signs of the taxpayer or its products, and intellectual property rights, as well as their transmission to unrelated entities, created by the entity. in the geographical scope of the Canary Islands Special Zone, in the proportion that they are located in the geographic scope of the Canary Islands Special Zone.
- The operations carried out from the activity centers of the entity of the Canary Special Zone located in the geographical scope of the Canary Special Zone destined for its branches located outside said geographical scope, when they have been used by the branch for the delivery of goods or the provision of services to third parties.
In the numerator , with negative sign , the amount of the following operations:
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The operations received by the activity centers of the entity located in the geographical area of the ZEC from its branches located outside said geographical area, provided that they have been used by the entity of the ZEC for the delivery of goods or the provision of services to third parties.
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Transfers of assets acquired by the ZEC entity from entities that do not have the status of ZEC entity as a result of operations under the special regime provided for in Chapter VII of Title VII of Law 27/2014.
In the denominator , the amount of all income and other positive components of the tax base of the ZEC entity.
The percentage resulting from the previous fraction is rounded to the nearest unit.