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Form 100. Personal Income Tax Return Declaration 2017

9.8.4.2. Deductions for the 2017 financial year

The investment modalities regulated in articles 35 to 43 of the Corporate Income Tax Law will be included, with the application of increased deduction percentages, in accordance with the provisions of article 94 of Law 20/1991, of June 7, modifying the fiscal aspects of the Economic and Fiscal Regime of the Canary Islands.

Thus, the rates applicable to investments made will be 80% higher than those of the general regime, with a minimum differential of 20 percentage points.

  • For expenses and investments in research and development activities:

    • R&D expenses: 45% deduction

    • R&D expenditure higher than the average of the previous two years: 75.6% deduction

    • Expenses eligible for additional deduction: 37% deduction

    • Investments in elements affected by R&D: 28% deduction

  • For expenses in technological innovation activities: 32% deduction

  • For investments in assets of cultural interest: 24% deduction

  • For investments in film productions, audiovisual series and live shows of performing and musical arts (Art. 36 of the LIS):

    • Investments made by the producer: 38% deduction

    • Investments made by the financial co-producer: 25% deduction

  • Book publishing: 21% deduction

  • For investments in environmental protection: 28%

  • For job creation for workers with disabilities: under the same conditions as in the general regime, 9,000 or 12,000 euros per person/year increase.

  • Deduction for investments in West African territories, and for advertising and publicity expenses. (Art. 27 bis of Law 19/1994)

  • For job creation: 3,000 euros or 50% unemployment benefit

  • By fixed assets: 25%

COMMON STANDARDS

Joint maximum limit of deductions

In accordance with the provisions of article 94 of Law 20/1991, of June 7, amending the tax aspects of the Economic and Tax Regime of the Canary Islands (as amended by DA 4 of Law 19/1994, of June 6), the maximum deduction limit will always be 80% higher than that set for the general regime, with a minimum differential of 35 percentage points.

Thus, the amount of the deductions listed above of the special regime for investments in the Canary Islands applied in the tax period may not exceed jointly of 60 percent of the quota resulting from reducing the sum of the full state and regional or complementary quotas 499 and 500) by the total amount of the deductions for investment in habitual housing (boxes 501 and 502) for investments and expenses in assets of cultural interest (boxes 504 and 505) and for the deduction for investment in new or recently created companies (box 503).

However, this limit is raised to 90 per 100 when the amounts of the deductions for scientific research and technological innovation activities and for the promotion of information and communication technologies that correspond to expenses and investments made in the tax period itself, exceed 10 percent of that same quota.

The limit will be 50% in the case of investments in the acquisition of fixed assets.

These limits, which apply independently of those corresponding to investments under the general regime, are calculated and applied by the programme.

Amounts not deducted

The amounts corresponding to the tax period not deducted may be applied in the settlements of the tax periods that end in the next immediate and successive years.

However, the amounts corresponding to deductions for scientific research and technological innovation activities and for the promotion of information and communication technologies may be applied in the liquidations of tax periods ending in the following fifteen years.

The calculation of the periods for the application of the deductions provided for in this chapter may be deferred until the first fiscal year in which, within the limitation period, positive results are produced, in the following cases:

  1. In newly created entities.

  2. In entities that offset losses from previous years by effectively providing new resources, without considering the application or capitalization of reserves as such.

MAINTAINING INVESTMENT

The assets affected by these deductions must remain in operation for five years, or three if they are movable assets, or during their useful life if this is less.

The deducted amount, in addition to late payment interest, will be paid together with the corresponding fee for the tax period in which non-compliance with this requirement is manifested.

Completion

The calculation of deductions for business investment is not performed by the program.

For the purposes of completion, a data capture window will open for each deduction in which you must provide the amount of the deduction, and if applicable, a lower amount if you do not wish to apply the entire amount in the 2016 declaration.

The program will apply the amount provided as long as it does not exceed the established maximum limits. If the indicated amount exceeds the applicable limit, the latter will apply.