Tax Incentives
Competition in the global market means companies must exploit any opportunity for growth. That´s why having a competitive and totally transparent TAX environment is first-rate strategic leverage. The Canary Islands are already home to companies from around the world that are maximizing their opportunities to grow thanks to the best fiscal incentives.
ZEC- Special Canary Zone ZEC entities are subject to the 4% Corporate Income Tax, which is applied to the max income tax,depending on the number of working places created within ZEC activity.
  • Double Taxation Agreements, Parent-Subsidiary Directive and Income Tax Non-resident (IRNR)
  • ZEC Entities are eligible for agreements which avoid double taxation, signed by Spain.
  • ZEC Entities are eligible for the Parent-Subsidiary Directive of the European Union.Dividends paid by ZEC subsidiaries to parent companies resident in another EU country are exempt from withholding.
  • ZEC and come from operations within geographical area of ZEC.
  • Exempt from VAT taxation

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    Detailed List
RIC- Сanary investment reserve This fiscal incentive allows a 90% reduction in the taxable base of retained earnings (Beneficios No Distribuidos) for corporate tax at the amount that companies contribute to the Canary Investment Reserve.
  • Initial investments:
    • the acquisition of new assets of tangible or intangible assets.
    • the creation of jobs.
    • the subscription of shares or participations.
  • The deadline for RIC materialization:3 years
  • Investment maintenance period: 5 years
  • Incompatible: used assets and land

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Income and Corporate Tax
  • -  Name: Corporate Income Tax [Impuesto sobre Sociedades]
  • -  General rate: 25%
*Reduced 15% rate for a newly established companies * 4% rate for ZEC companies
  • Tax on the income of resident individuals
    • -  Name: Personal Income Tax
    • -  Rate: (i) general rate: 19% to 45%; (ii) savings income rate: 19% to 23%
  • Tax on the income of non-resident individuals and entities
    • -  Name: Non-Resident Income Tax -  Rate: (i) general: 24%; (ii) dividends: 19%; (iii) interest: 19%; (iv) royalties: 24%.
  • Value Added Tax [Impuesto sobre el Valor Añadido] (“VAT”)
  • - General rate: 21%
*The Canary islands tax rate: 7%
  • Transfer Tax:
Transfer of goods between natural and legal persons not subject to VAT
  • -Tax rates: 2% to 11%, depending on the autonomous region
  • Corporate Transactions Tax:
Certain corporate transactions, mainly capital reduction and dissolution of companies. Not recoverable.
  • -Tax rate: 1% of the value of the goods and services returned to shareholders.
  • Stamp Duty:
The notarized documentation of certain transactions in a public deed. Not recoverable (higher purchase value).
  • -Tax rate: in general, 0.5% to 2.5% of the value of the documented transaction in the public deed (depending on the autonomous region where the transaction is carried out).
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