Tax incentives in the Canary Islands for R&D&I and the video game industry
Take advantage of the biggest tax incentives in Europe for R&D projects and video game development in the Canary Islands.
The Canary Islands offer one of the most advantageous tax frameworks in Europe for innovative companies and video game studios. Thanks to its Economic and Fiscal Regime (REF), companies developing R&D projects and video games can access significantly higher tax deductions than those available in the rest of Spain and Europe.
This favorable environment allows for a substantial reduction in the tax burden, improved project profitability, and reinvestment of resources in talent, technology, and growth. Both startups and established companies can take advantage of specific incentives for research, technological development, digital production, and intellectual property creation.
Tax incentives
The Canarian Special Zone, with a reduced IS rate of 4% for the creation of new companies.
The Investment Reserve in the Canary Islands allows the BI of the IS to be reduced by 90% of the undistributed profit, with a commitment to re-invest as compensation.
Deducción por Investigación y Desarrollo hasta el 75%.
Deducción por Innovación tecnológica hasta el 45%.
R&D&iT incentives in the Canary Islands
All companies that make investments in Research, Development and Technological Innovation (R+D+iT) have the right to access the corresponding tax incentives. These incentives are based on deductions applied to corporate tax and are generated through the execution of research, development and/or technological innovation projects.
El marco normativo permite transformar estas deducciones fiscales en liquidez a través de inversores privados. Convirtiéndose así en una fuente de financiación para el proyecto.
Its main objective is to promote innovative activity in the private sector and promote its integration into the productive framework.
- Applicable rates are 80% higher than those of the general regime
- Minimum difference of 20 percentage points compared to those of the general regime
Differences between the Canary Islands and the Peninsula in tax deduction
Peninsula | Canary Islands | |
|---|---|---|
R&D expenses Article 35.1 LIS | 25 % | 45% / 75,6% (if spending increases compared to the previous year) |
Research staff Article 35.1 LIS | 17 % | 37 % |
Investments in R&D Article 35.1 LIS | 8% | 28 % |
Disabled workers Article 38 LIS | ||
— Degree of disability: 33% | 9.000 | 11.700 |
— Degree of disability: 60% | 12.000 | 15.600 |
Port authority investments Article 38 bis LIS | Investment or expense amount | The one resulting from applying the percentage of maximum aid intensity authorized by the commission. |
Payment Solution
video games in the Canary Islands
The Canary Islands offer a number of attractive tax advantages that are successfully applied to the development of video games thanks to the Economic and Fiscal Regime (REF) of the Canary Islands within the legal framework of the EU and Spain.
Animation and video game projects are considered innovative, so they can be eligible for the tax deductions offered by the Canary Islands Economic and Fiscal Regime.”
In this sector, the Deduction for Research and Development and the Deduction for Technological Innovation stand out, potentially reaching up to 75% and 45% respectively.
Turn innovation and creativity into a real tax advantage
Our team accompanies you throughout the entire process: from the identification and structuring of projects, to the effective application of tax incentives, ensuring maximum benefit with complete legal security.
R&D Tax Lease
We provide investors for your projects
It is a financial vehicle, validated years ago by the State Tax Administration Agency (AEAT), that allows private investment, with high profitability, to be channeled to companies active in R&D&I that do not have sufficient positive tax bases to take advantage of their own tax deductions, and that through this instrument can obtain financing for their R&D&I project of up to 50%.
How Does It Work?
It is structured through an Economic Interest Grouping (EIG), which acquires ownership of the project, subcontracting the R&D&I activities to the company, and transfers the tax credits (tax deductions and negative tax bases) generated by its activity to its investors.
Who is this service for?
Two distinct types of profiles:
To companies active in R&D&I, with an annual expenditure on these activities of at least €200.000, and which, due to their current situation, cannot take advantage of their own tax deductions for R&D&I activities, that is, which do not have positive tax bases, and which are interested in financing their innovative project.
How Can We Support Your Project?
- Initial Project Assessmentto determine its fit within this financial tool.
- Operational and contractual structuring, which allows you to set up the operation in the best possible way for the type of project and for your needs
- Ongoing monitoring and support throughout the entire useful life of the operation.
To individuals (self-employed) and legal entities that have high positive tax bases and are interested in reducing their tax burden.
How Can We Support Your Project?
- Study of investment capacity, which allows maximizing performance
- Legal Advice and Support, to resolve any possible doubts
- Search for the R&D&I project that best fits based on the investor's personal interests
- Ongoing monitoring and support throughout the entire useful life of the operation.
Economic Interest Grouping (AIE)
An economic interest grouping (EIG) is a business entity that aims to improve the results of its members' activities. Specifically, the EIG is limited to a single economic activity that is ancillary to the activities carried out by its members.
The option of forming an Economic Interest Grouping (EIG) is very interesting for investors and producers.
- Facilitate the developer's access to external financing
- Tax benefits are allocated proportionally to the contributions of the partners.
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