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V0747-18 20 March 2018 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · reserva para inversiones en canarias

RIC cannot be implemented via financial instruments if the project already claims the Spanish production tax deduction

A consultation was made regarding whether investment in financial instruments issued by an entity to finance audiovisual productions qualifies for the Canary Islands Investment Reserve (RIC). The Directorate-General for Taxes (DGT) ruled that, even if the project meets Canary Islands production requirements, an incompatibility exists if the producer applies the tax deduction under Article 36.1 of the Corporate Income Tax Act.

The question raised

Whether the investment in the financial instruments issued by the financial institution to finance said projects is considered eligible to materialize the RIC.

The DGT's ruling

The materialization of the RIC through financial instruments is possible provided that the funds finance projects whose investments are eligible under Canary Islands regulations. However, Article 27.12 of Law 19/1994 establishes the incompatibility between the RIC and deductions for incentivizing activities regulated in the LIS. Therefore, if the producer benefits from the deduction under Article 36.1 of the LIS, the instruments issued to finance those same costs are not eligible for the RIC.

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