The Canary Islands Special Zone (ZEC)
CORPORATE INCOME TAX
ZEC Entities are subject to the
Corporate Income Tax in force in Spain at reduced rates ranging from 1% to
5% depending on:
The general tax rate of the Corporate Income Tax in Spain is 35%, or 30% in the case of Small and Medium-sized Enterprises (SME).
Tax rate scale
In order to determine the tax rate applicable to a ZEC Entity, the period from the registration of the ZEC Entity to the end of the validity of the ZEC shall be divided into three stages. The length of these stages will vary depending on the year in which the ZEC Entity is registered.
The applicable tax rates shall be levied on the taxable amount arising from operations materially and effectively carried out within the ZEC territory.
Considering the above-mentioned stages and the net job creation of a ZEC Entity, the tax rates will be as follows:
General taxation scheme
Definition of the stages
If the activity of a ZEC Entity has been carried out previously with a different ownership, and the pre-existing workforce is retained, the tax rates will be established according to the relative increase in the workforce.
Entities with a pre-existing activity
The special tax rates (between 1% and 5%) shall be applied to a maximum amount of the tax base which will vary according to the number of jobs created by the ZEC Entity and its type of activity.
Maximum amounts of the tax base at which ZEC entities will benefit from the special tax rates
2 “OTHER SERVICES” include the following NACE activities: wholesale trade and commission trade, except of motor vehicles and motorcycles; activities of travel agencies and tour operators; tourist assistance activities n.e.c.; legal, accounting, book-keeping and auditing activities; tax consultancy; market research and public opinion polling; business and management consultancy; holdings, and advertising and public relations services.
DOUBLE TAXATION AGREEMENTS, THE EU PARENT SUBSIDIARY DIRECTIVE AND NON-RESIDENT INCOME TAX
The Canary Islands are an integral part of Spanish
territory and the European Union and therefore:
These exemptions will not be applied if the profits have been obtained through a territory considered as a tax haven, nor if the tax domicile of the parent company is on such territories.
GENERAL INDIRECT TAX IN THE CANARY ISLANDS (IGIC)
The IGIC is the Canarian Indirect Tax which is levied on the end product, substituting Value Added Tax applied in the EU. Its nature is similar to that of VAT, although with important differences such as lower tax rates. The general IGIC rate is 5%.
As a general rule, ZEC Entities are exempt from IGIC when selling goods and delivering services to other ZEC Entities, as well as when importing goods.
The ZEC extends over the whole Canarian
territory with the following specifications:
Offshore- Gesellschaften gründen