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Form 100. Personal Income Tax Declaration 2018

9.8.4.2. Deductions for fiscal year 2018

The investment modalities regulated in articles 35 to 43 of the Corporate Tax Law will be included, with application of the 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 percent 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 expenses higher than the average of the previous two years: 75.6% deduction

    • Expenses with the right to additional deduction: 37% deduction

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

  • For expenses on technological innovation activities: 45% deduction

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

    • Spanish productions of feature films and audiovisual series deduction of 45 or 40%

    • Expenses for the execution of a foreign production, expenses incurred in Spanish territory: 40% deduction

    • Production and exhibition expenses for live performing arts and musical shows: 40% deduction

      - For job creation for workers with disabilities: under the same conditions as in the general regime, 11,700 or 15,600 euros per person/year increase.

  • Deduction for investments in West African territories, and for propaganda and advertising expenses. (Art. 27 bis of Law 19/1994) 15 or 10%

  • By job creation: 3,900 euros or 65% unemployment benefit.

  • Investments in acquisition of fixed assets: 25% deduction

COMMON STANDARDS

Joint maximum limit of deductions

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 (according to the wording given by DA 4 of Law 19/1994, of June 6), the maximum deduction limit will always be 80 percent higher than that set for the general regime, with a minimum differential of 35 percentage points.

Thus, the amount of the deductions listed above from the special regime for investments in the Canary Islands applied in the tax period may not exceed jointly of 60 percent of the fee resulting from reducing the sum of the full state and regional or complementary fees in the total amount of deductions for investment in habitual residence for investments and expenses in assets of cultural interest and for deduction for investment in new or recent companies creation.

However, this limit is raised to 90 times 100 when the amounts of 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. On the islands of La Palma, La Gomera and El Hierro these limits are raised to 70 and 100% when the Community regulations on state aid allow it and they are investments contemplated in Law 2/2016.

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

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

Amounts not deducted

The amounts corresponding to the tax period not deducted may be applied in the settlements of the tax periods ending in the ten 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 settlements of tax periods ending in the following fifteen years.

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

  1. In newly created entities.

  2. In entities that clean up losses from previous years through the effective contribution of new resources, without the application or capitalization of reserves being considered as such.

INVESTMENT MAINTENANCE

The assets subject to these deductions must remain in operation for five years, or three if they are movable assets, or during their useful life if shorter.

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

Completion

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

For the purposes of completion, for each deduction a data capture window will open in which you must provide the amount of the deduction, and, where appropriate, 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 maximum limits established. If the indicated amount exceeds the applicable limit, the latter will be applied.