Self-employed individuals in the Canary Islands must operate through establishments in the region to apply the RIC

The application of the Canary Islands Investment Reserve (RIC) for taxpayers under Personal Income Tax (IRPF) using the direct estimation method is conditioned by the nature of the income obtained. Tax residence in the islands is not enough; it is necessary that the income derives from economic activities developed through permanent establishments in the Canary Islands territory.

What the DGT has ruled

The Directorate General of Taxes (DGT) has specified that, to access the RIC benefit, income must come from economic activities carried out through establishments located in the Canary Islands. In this sense, the administration distinguishes the classification of different types of income:

• Income from economic activity: Income derived from concepts such as matches or sponsorships may be classified as such if they are integrated into the structure of the activity.
• Income from movable capital: The assignment of image rights will not be considered income from economic activity if it is not carried out within the scope of an organized economic activity.

Therefore, the requirement to have a permanent establishment in the islands is an essential element for the income to be computable for the application of this reserve.

What this means for you

If you are a self-employed professional residing in the Canary Islands, the possibility of applying the RIC depends on the infrastructure with which you carry out your activity. If your income comes from image rights that are not linked to an organized economic activity through an establishment in the region, those amounts will be considered income from movable capital and cannot be subject to the reserve.

This criterion establishes a clear boundary between what constitutes economic activity and what is merely the obtaining of patrimonial income, limiting the scope of the tax benefit to those who maintain a real and physical operational presence in the archipelago.

What you should do

It is necessary to verify that the structure of the economic activity complies with the requirement of having establishments in the Canary Islands. Likewise, the correct classification of the different income flows must be analyzed, especially regarding image rights and sponsorships, to ensure they are correctly integrated into the economic activity base and not as income from movable capital. It is recommended to assess each particular situation to determine whether current operations allow access to this tax incentive.