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V0418-16 3 February 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · reserva para inversiones en canarias

Certain real estate investments may qualify for the Canary Islands Investment Reserve under specific conditions

A tourism company in the Canary Islands has requested clarification on whether purchasing land, constructing premises, renovating properties, or buying used commercial premises qualifies for the Canary Islands Investment Reserve (RIC). The Directorate General for Taxes (DGT) examines whether these operations constitute initial investments or fall under other categories defined by Canary Islands regulations.

The question raised

Whether the aforementioned investments can be considered eligible to materialize the Reserve for Investment in the Canary Islands.

The DGT's ruling

The purchase of land for demolition and construction, or for the construction of commercial premises, is considered an initial investment for the creation of an establishment. The rehabilitation of a property may constitute an expansion of an establishment if it increases the value of the asset. The acquisition of a used premises is not an initial investment if the conditions of Article 101 of the LIS are not met, but it may be eligible if the land is located in a commercial zone undergoing rehabilitation. For the lease of these assets to be valid, the company must be a tourism company, have no link to the lessees, and must not engage in financial leasing.

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