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V0746-18 20 March 2018 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
OTRO · reserva para inversiones en canarias

Canary Islands Investment Reserve can be funded through equity or debt

A query was raised regarding whether private project financing for the Canary Islands Investment Reserve can be structured using share capital or debt instruments. The Directorate-General for Tax (DGT) ruled that, as the regulations do not specify a particular method, both options are valid.

The question raised

Whether the financing of private projects can be carried out both through participation in the capital of the companies developing the projects and through debt financial instruments (loans, bonds, participating loans...).

The DGT's ruling

Participation in the share capital of the entity developing the project or financing through debt instruments may be considered valid means to materialize the Investment Reserve in the Canary Islands. This is due to the fact that the regulations do not determine a specific form for instrumenting the financing of the projects referred to in Article 27.4.D.3 of Law 19/1994.

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