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V2704-14 9 October 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · bonificación

Subsidies linked to business activity are not included in bonusable income in the Canary Islands

A yogurt manufacturer in the Canary Islands inquired whether received subsidies could be included in the accounting result of the activity to apply the tax relief provided for in Article 26 of Law 19/1994. The Directorate General for Taxes (DGT) ruled that these grants are not considered income derived from the sale of tangible goods.

The question raised

Whether it is possible to include the mentioned subsidies and grants as an integral part of the accounting result of the productive activity eligible to benefit from the tax relief established in Article 26 of Law 19/1991.

The DGT's ruling

Subsidies or grants received for the development of the activity, the yields of which are subject to the tax relief provided in Article 26 of Law 19/1994, are not considered such yields, even if they are linked to the price. Therefore, the gross tax liability corresponding to said subsidies may not form part of the base for the tax relief.

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