News published in INFORMA 2023

News published in INFORMA during the month of APRIL

Taxpayers may make advance investments, which will be considered as materialization of the investment reserve that is provided from profits obtained in the tax period in which the investment is made or in the three subsequent periods, provided that the remaining requirements demanded in the same are met.

The application of the benefit of the investment reserve will be incompatible , for the same assets and expenses, with the deductions to encourage the performance of certain activities regulated in Chapter IV of Title VI of the LIS .

The assets in which investment is materialized must be located or received in the Balearic archipelago, used therein, be affected by and be necessary for the development of economic activities of taxpayer , except in the case of those that contribute to the improvement and protection of the environment in the Balearic territory.

The Seventieth Additional Provision of the General State Budget Law for 2023 introduces the special tax regime of the Balearic Islands with effect for tax periods beginning between January 1, 2023 and December 31, 2028.

The Investment Reserve must appear on the balance sheet with absolute separation and appropriate title and will be unavailable as long as the assets in which it was materialized must remain in the company.

The reduction will be applied to the allocations made to the Investment Reserve in each tax period up to the limit of 90 percent of the portion of profit obtained in the same period that is not subject to distribution, insofar as it comes from establishments located in the Balearic Islands, without in any case the application of the reduction being able to determine that the tax base is negative.

The amounts allocated to the reserve for investments in the Balearic Islands d must be materialized within a maximum period of three years.

The Reserve for investments in the Balearic Islands is created with the aim of ensuring that taxpayers of Corporate Tax and Non-Resident Income Tax have the right to a reduction in the tax base for the amounts that, in relation to their establishments located in the Balearic Islands, they allocate from their profits to the reserve for investments.