Special tax regime of the Balearic Islands

Taxpayers of Corporate Tax and Non-Resident Income Tax will apply a 10 percent bonus on the full amount corresponding to the income derived from the sale of tangible goods produced in the Balearic Islands by themselves, typical of agricultural, livestock, industrial and fishing activities , in the latter case in relation to catches made in their fishing and aquaculture area.

Subsidies and aid will not form part of ## the performance to which the bonus may be applied, unless they must be passed on in the sale price of the product to the end user.

Those who may benefit from this bonus are: persons or entities domiciled in the Balearic Islands or in other territories that are dedicated to the production of tangible goods, produced in the Balearic Islands by themselves, typical of agricultural, livestock, industrial and fishing activities, through a branch or permanent establishment.

The application of the bonus in each tax period will require that the average workforce of the entity in said period is not less than the average workforce corresponding to the twelve months prior to the beginning of the first tax period in which the regime takes effect. When the entity has been established within the aforementioned period of twelve months, the average workforce resulting from that period will be taken into account.

The bonus will be increased up to 25 percent in those tax periods in which, in addition to meeting the requirement set forth in the previous paragraph, there has been an increase in the average workforce of no less than one with respect to the average workforce of the previous tax period and said increase is maintained for at least a period of three years from the date of completion of the tax period in which this increased bonus is applied.

To calculate the average number of employees of the entity, the number of people employed will be taken into account, in accordance with the terms established by labour legislation, taking into account the contracted working hours in relation to the full working day.

The bonus will not be applicable to income derived from the sale of tangible goods produced in the Islands related to shipbuilding, synthetic fibres the automobile industry, steel industry and coal industry.

It will be necessary that deep-sea fishing be landed in the Balearic ports and handled or transformed in the archipelago.

Activities that produce recreational floating artifacts as referred to in article 3.3 of Royal Decree 875/2014, of October 10, regulating nautical qualifications for the control of recreational vessels, will not be considered activities.