Regulation news 2019
Skip information indexCanary Islands Special Zone (ZEC) Branches in tax consolidation
ZEC Due to the novelty introduced by article One. Forty-three of Law 8/2018, of November 5, which modifies Law 19/1994, of July 6, modifying the Economic and Fiscal Regime of the Canary Islands, which we attach, we prepare this note with the in order to explain how taxpayers should submit their corresponding Corporate Tax return:
With effect for tax periods beginning on or after January 1, 2018, a new fourteenth Additional Provision is added bis with the following wording:
«Additional Provision fourteen bis. Corporation Tax. Application of the tax consolidation regime to entities with branches in the Canary Islands Special Zone .
The application of the special tax rate established in article 43 of this Law in the case of branches of the Canary Islands Special Zone of entities with tax residence in Spain will not prevent said entities from being part of a tax group that applies the planned tax consolidation regime. in Chapter VI of Title VII of Law 27/2014, of November 27, on Corporate Tax.
Notwithstanding the foregoing, the part of the tax base of the entity that is part of a tax group and that is attributable to the branch of the Canary Islands Special Zone will not be included in the individual tax base of the entity for the purposes of determining the tax base of the tax group, being the subject of a separate declaration in the terms that are determined by regulation."
Due to the lack of regulatory development, taxpayers who have branches in the Canary Islands Special Zone of entities with tax residence in Spain that are part of a tax group that applies the tax consolidation regime must present two forms 200 , since the law provides that it will be declared separately:
- Form 200 to declare the part of the Tax Base to which the ZEC zone tax rate will be applied:
Box 00015 “ZEC Entity” on page 1 of Form 200 must be marked, without indicating that it is part of a tax group, that is, without marking the characters 00009 “Dominant entity of tax group” or 00010 “Dependent entity of tax group ” included on page 1.
This declaration must be completed only with data relating to the branch of the Canary Islands Special Zone of entities with tax residence in Spain, both on the pages dedicated to Balance Sheet, Profit and Loss Account and Statement of changes in net worth, as well as the data relating to the liquidation.
When character 00015 is marked in the form for completing model 200, Web Companies 2018 will open a window so that it can be indicated whether the entity also pays tax through tax consolidation. In the event that the presentation of the Corporate Tax is carried out using an external development instead of Web Companies, use must be made of a new field created for this purpose in the Registration Design called "ZEC Entity that belongs to a tax group".
- Form 200 for the part of the Tax Base that is not taxed at the special rate and that will apply a special consolidation regime:
The characters 00009 “Dominant entity of tax group” or 00010 “Dependent entity of tax group” must be marked, as the case may be, included on page 1 of Form 200, without indicating that the Canary Islands Special Zone Branch applies. the type of special tax, that is, without checking box 00015 “ZEC Entity”.
This declaration must be completed only with data related to the entity that is part of a tax group and that is not attributable to the branch of the Canary Islands Special Zone, that is, data related to the individual tax base of the entity must be incorporated. for the purposes of determining the tax base of the tax group, both on the pages dedicated to Balance Sheet, Profit and Loss Account and Statement of changes in net worth, as well as the data relating to the liquidation of the part that will apply the regime of fiscal consolidation.
Joint note from the Departments of Tax Management and Financial and Tax Inspection - May 2019