Doctrine by topic · DGT Observatory

Canary Islands Tax Regime: DGT doctrinal evolution

How the DGT's position on this topic has evolved, and the rulings it rests on.

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How the DGT's position has evolved

Settled doctrine Medium confidence 10 rulings · 2014–2024

Current position

To apply the incentives of the Canary Islands regime, expenses and investment elements must be carried out and remain within the archipelago. In the case of AIE (Investment Assistance Entities), partners apply the deduction bases in their own tax returns. If production or exhibition expenses are incurred outside the Canary Islands, the application of increased tax rates or deduction limits is not applicable.

The DGT's position remains constant in requiring territoriality for the application of incentives. Rulings confirm that the investment must be carried out and remain in the Canary Islands, rejecting benefits when expenses or assets are located outside the archipelago or lack the nature of tangible fixed assets.

Turning points

  1. V0171-15

    Establishes that investments in used fixed assets are only eligible if they represent a clear technological improvement.

Analysis based on 10 of 10 rulings with a stated position. Updated 28 September 2026.

Rulings on this topic

10
V2120-24 1 Oct 2024

Increased Canary Islands tax deduction percentages do not apply if expenses are incurred outside the archipelago

SG de Impuestos sobre las Personas Jurídicas
agrupación de interés económicodeducción por espectáculos en vivorégimen económico fiscal de canariasimputación de bases de deduccióngastos de producción LIS — Ley 27/2014 del Impuesto sobre Sociedades art. 36.3LIS — Ley 27/2014 del Impuesto sobre Sociedades art. 39
Affects CompanyExpat · Non-residentIndividual
V1922-24 3 Sept 2024

Increased R&D+i tax credits in the Canary Islands cannot be applied if the partner does not reside there or lacks a permanent establishment

SG de Impuestos sobre las Personas Jurídicas
agrupación de interés económicodeducción por i+d+iimputación de basesrégimen económico fiscal de canariasestablecimiento permanente LIS — Ley 27/2014 del Impuesto sobre Sociedades art. 35LIS — Ley 27/2014 del Impuesto sobre Sociedades art. 43
Affects CompanyExpat · Non-residentIndividual
V3433-15 11 Nov 2015

Details of deductible expenses in foreign audiovisual productions in Spain

SG de Impuestos sobre las Personas Jurídicas
deducción por producciones audiovisualespersonal creativoindustrias técnicasbase de deduccióngastos de producción LIS — Ley 27/2014 del Impuesto sobre Sociedades art. 36.2LIS — Ley 27/2014 del Impuesto sobre Sociedades art. 39.1
Affects CompanyExpat · Non-residentIndividual
V2402-15 29 Jul 2015

Canary deduction rate for foreign audiovisual productions reaches 35%

SG de Impuestos sobre las Personas Jurídicas
deducción por inversionesproducción audiovisualpersonal creativoindustrias técnicasrégimen económico fiscal de canarias LIS — Ley 27/2014 del Impuesto sobre Sociedades art. 36.2LIS — Ley 27/2014 del Impuesto sobre Sociedades art. 39.1
Affects CompanyExpat · Non-residentIndividual

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