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V2554-14 30 September 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · bonificación

ZEC entities may apply the tax rebate for the production of tangible goods in the Canary Islands

A company within the Canary Special Zone (ZEC) engaged in manufacturing fishing nets has enquired whether it can apply the 50% tax rebate on its tax liability for producing tangible goods. The Directorate General for Taxes (DGT) has ruled that this is compatible, provided that activity requirements are met and the company does not operate within the excluded sectors.

The question raised

Whether a company, as an entity of the Canary Special Zone dedicated, among other activities, to the manufacturing of fishing nets, may apply the special regime for companies producing tangible goods provided for in Article 26 of Law 19/1994.

The DGT's ruling

Entities within the ZEC may benefit from the tax relief provided in Article 26 of Law 19/1994, as this constitutes an operating aid compatible with ZEC incentives. To qualify, the activity must be transformative (manufacturing products from raw materials) and must not belong to excluded sectors such as shipbuilding or the automotive industry. Application is subject to compliance with legal requirements and to the condition that the goods are intended for sale.

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