The State-Balearic Islands Bilateral Commission has agreed to resolve discrepancies regarding Decree-law 1/2026 to prevent certain financial aids from being improperly taxed (Annex I). The agreement establishes that the grants or subsidies mentioned in article 3 quinquies of the Autonomous Community's Recast Text will not form part of the taxpayer's income from economic activities (Annex I). This pact ends the legal controversy between the State and the Autonomous Community regarding the application of measures to mitigate the economic crisis.
For taxpayers (companies and the self-employed) in the Balearic Islands receiving the grants or subsidies regulated by Decree-law 1/2026, the effect is an improvement in their tax burden, as they are explicitly excluded from the base of income from economic activities (Annex I). This prevents double taxation or an unwanted tax burden arising from the current economic crisis. The regional administration commits to undertaking the necessary legislative amendment to formalise this criterion (Annex I).
The administrative team reviews your specific situation.