Special tax regime of the Balearic Islands
If you are a resident of the Balearic Islands you should read this
Reserve for investments in the Balearic Islands
1. Taxpayers of Corporate Tax and Non-Resident Income Tax will have the right to reduction in the tax base of the amounts that, in relation to their establishments located in the Balearic Islands, they allocate their profits to the reserve for investments in accordance with the provisions of this section.
2. The reduction will be applied to the contributions that in each tax period are made to the reserve for investments up to the limit of 90% of the part of the profit obtained in the same period that is not subject to distribution, as far as it comes from establishments located in the Balearic Islands.
In no case may the application of the reduction determine that the tax base is negative.
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4. The amounts allocated to the reserve for investments in the Balearic Islands d must be materialized within a maximum period of three years, c counted from the date of accrual of the tax corresponding to the year in which it was allocated. the same, in making any of the investments indicated in this number.
5. The assets in which the investment is materialized must be located or received in the Balearic archipelago, 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 Balearic territory.
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10. The taxpayers referred to in this section may carry out early investments, which will be considered as materialization of the reserve for investments that is allocated with a charge to profits obtained in the tax period in which the investment is made or in the subsequent three, provided that the remaining requirements required therein are met.
The materialization and its financing system will be communicated together with the Corporate Tax declaration, the Non-Resident Income Tax or the Personal Income Tax of the tax period in which the investments are made. advance .
11. The application of the benefit of the reserve for investments will be incompatible , for the same goods and expenses, with the deductions to encourage the performance of certain activities regulated in Chapter IV of Title VI of the Law 27/2014, of November 27, on Corporate Tax. It will also be incompatible for the same goods and expenses with any tax benefit or measure of a different nature that has the status of state aid under European Union Law, if said accumulation exceeds the limits established in the Community Regulations that, in each case, are applicable.
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13. Personal Income Tax taxpayers who determine their net income using the direct estimation method will be entitled to a deduction in the full quota for the net operating income that is allocated to the investment reserve , as long as these come from economic activities carried out through establishments located in the Balearic Islands.
In order to enjoy the reserve for investments in the Balearic Islands, natural persons must keep accounts in the manner required by the Commercial Code and its implementing regulations from the year in which they are have obtained the benefits that are intended to provide the reserve for investments in the Balearic Islands until the time in which the assets subject to the materialization of the investment must remain in operation.
The deduction will be calculated by applying the average tax rate to the annual contributions to the reserve and will be limited to 80% of the part of the full quota that proportionally corresponds to the amount of the income net operating income that comes from establishments located in the Balearic Islands, provided that the limits established in the Community Regulations that, in each case, are applicable are not exceeded.