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V0659-16 17 February 2016 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · reserva para inversiones en canarias

RIC reserves may be funded using profits from property sales if the asset generated income in the preceding three years

A jewellery company has enquired whether profits from the sale of a property can be used to fund the Canary Islands Investment Reserve (RIC). The Directorate-General for Taxes (DGT) has ruled that this is permissible provided the property generated income for at least one year within the three years prior to the transfer.

The question raised

1. Whether the entity can allocate to the Canary Islands Investment Reserve (RIC) the profits obtained from the sale of the real estate.

The DGT's ruling

The benefit from the transfer of assets not used for economic activity is eligible for the RIC if the real estate generated income for at least one year within the three years prior to the date of transfer. If the acquired real estate is used, it may only be considered an initial investment if the entity is of small size; otherwise, the investment will be eligible under letter C if it is used for the development of the economic activity. In the event that the acquired real estate is intended for leasing, the requirement for the materialization of the RIC would not be met as leasing activity is not an economic activity according to the LIS.

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