Help for Canary Island businesses

CONDUCT CONSULTATION

Deductions

Deductions can apply to companies in the ZEC Zone and to all companies, business activities and also individual persons or branches of companies in mainland Spain or foreign countries.

Companies based in the Canary Islands and their branches may deduct 90% from their profits that are not subject to distribution.

This deduction must be made during the maximum term of three years counted from the date of accrual of the tax. In practice, this is four years when counting the year in which the profits are made.

This will be attained through:

  • Initial Investments
  • Commercial and tourist areas in renovation
  • Intangible assets
  • Creation of jobs directly related to the investment
  • Acquisition of tangible fixed assets or intangible assets other than the initial investment

Investment in land should be allocated for:

  • Promotion of protected housing
  • Industrial activities
  • Commercial and tourist areas in renovation
  • In shares of other companies that require a reinvestment commitment
  • 50% of the amount can be delivered in Canary Islands public debt

Deductions can apply to companies in the ZEC Zone and to all companies, business activities and also individual persons or branches of companies in mainland Spain or foreign countries.

Companies with a turnover of less than 10 million euros and less than 50 workers may make the following deductions from their overall tax bill:

  • 15% for investments in the creation of subsidiaries or permanent establishments
  • 15% for the amount paid for advertising and publicity

These companies, located in the Canary Islands, will apply a discount of 50% of the overall tax bill corresponding to the income derived from the sale of tangible goods produced in the Canary Islands.

The activities are agricultural, livestock-related, industrial and fishing-related provided that in the case of deep-sea fishing, it is landed at Canary Island ports.

The Canary Islands offer a series of attractive tax advantages that are successfully applied for audiovisual production thanks to the Economic and Fiscal Regime (REF) 1 of the Canary Islands in the legal framework of the EU and Spain.

These circumstances consolidate the Canary Islands as one of the best places in Europe to host shoots, as these benefits are combined with the climate, natural conditions and diversity of landscapes.

Tax Incentives:

  1. Deduction for investments in foreign productions: 35%
  2. Deduction for investment in Spanish productions or co-productions: 40% – 38%
  3. The Canary Islands Special Zone (ZEC) 2, for the creation of companies in the Canary Islands, paying tax at a reduced rate of 4% for Corporate Tax, and compatible with the aforementioned tax benefits.

The deduction for technological innovation is 45%

  • Discount of 90% of corporate tax
  • Discount of 90% of the social security fees of the business
  • The crew members can to consider 50% of their income as exempt income
This tax is an indirect state tax, applicable exclusively in the territorial area of the Canary Islands, which taxes the production and importation of goods and at the same time establishes deductions and exemptions applicable to certain products manufactured locally.

  • Articles taxed on entrance: See
  • Items not taxed on their internal delivery: See

The Specific Supply Arrangements (SSA) is one of the specific measures designed by the European Union to alleviate the remoteness, insularity and outermost location of the Canary Islands, which consists of establishing a system of aid for the supply of a series of agricultural products, which are essential in the Canary Islands for human consumption, processing and use as agricultural inputs.

  1. Products that can benefit from the SSA

In the case of the Canary Islands, the agricultural products listed in Annex I to the Founding 0Treaty of the European Union which are essential for human consumption, the production of other products or for their use as agricultural inputs can benefit from the SSA.

  1. Aid for Insular Transport

Depending on their origin, and within the quantitative limits established by the supply forecast plan 2017 list, products imported/introduced into the Canary Islands may benefit from:

– Exemption from import duties

The amount of this aid shall be determined for each type of product on the basis of the additional costs of transport to the outermost regions and the export prices to third countries and in the case of products intended for processing or for agricultural inputs, on the additional costs arising from the outermost location, and in particular from the insularity and scarcity of land.

For example;

Product: 0201.10.00.9110 BOVINE MEAT / AID IN EUROS 1.000KG: 75 € / Direct consumption.

Product: 0201.10.00.9110 BOVINE MEAT / AID IN EUROS 1.000KG: 75 € / insular Agrarian transport (transport between islands of the processed product).

SEE ANNEX LIST UNITS OF AID AS FROM 01/01/2017