Other deductions and allowances

Spanish entities domiciled for tax purposes in Ceuta and Melilla, which have their effective management headquarters in Ceuta and Melilla and foreign entities not resident in Spain and which operate in said territories through a permanent establishment, which operate effectively and materially in Ceuta and Melilla for a period of no less than 3 years, may apply the bonus provided for in article 33 of the LIS for income obtained outside said cities in the tax periods that end after the aforementioned period has elapsed when at least half of their assets are located there.

Nonetheless, income from property leases located outside of said territories are exempt from the above.

The maximum amount of income with the right to the rebate is that of the income obtained in Ceuta and Melilla.

There will be a 50% bonus on the portion of the full tax rate that corresponds to income obtained in Ceuta or Melilla by entities that operate effectively and materially in said territories.

These organisations are the following:

1. Spanish companies whose physical registered address is in these territories.

2. Spanish companies whose physical registered address is outside these territories which operate in them through an establishment or branch.

3. Foreign companies whose registered address is not in Spain which operate in these territories through a permanent establishment.

Income acquired in Ceuta or Melilla is considered to be that which corresponds to activities that determine the end of a trade cycle with economic results in said territories.

For these purposes, the requirements of the previous paragraph will be considered met when it comes to leasing property located in these territories.

These circumstances will not be considered met for one-off extraction, manufacturing or purchasing operations, or for the inflow or outflow of merchandise and, in general, when the operations themselves do not generate an income.

For the purposes of applying the bonus provided for in article 33 of the LIS , the income obtained in Ceuta and Melilla will be considered to be those corresponding to entities that operate effectively and materially there, which have, at least, a fixed place of business in said territories, up to an amount of 50,000 euros per person employed with a full-time employment contract who performs their duties in Ceuta or Melilla, with a total maximum limit of 400,000 euros.

In the event of acquiring an income that is higher than the aforementioned amount, the application of this rebate is subject to accreditation of the close of a trade cycle that determines economic results in Ceuta or Melilla.

These amounts will be determined at the level of the company group for entities that form part of the group, according to the criteria established in article 42 of the Code of Commerce, regardless of place of residence and the obligation to elaborate consolidated annual accounts.

Furthermore, income derived from wholesale trade will be understood as income acquired in Ceuta or Melilla when this activity is organised, run, contracted and invoiced via a fixed place of business located in said territories, which has the material and personal means needed to do so.

With maritime navigation companies, income is attributed to Ceuta and Melilla in accordance with the same criteria and percentages applicable to fishing companies, replacing the reference to landings and catches with journeys, freight and leases contracted there.

In the case of air navigation entities, income will be attributed to Ceuta and Melilla according to the same criteria and percentages applicable to fishing companies, replacing the reference to landings of catches with that of tickets, freight and leases contracted there.