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Practical manual for Income Tax 2024. Volume 1

f) Information to be provided in the personal income tax return

The maximum period for materializing the reserve for investments in the Canary Islands (RIC) is three years, pursuant to the provisions of article 27.4 of Law 19/1994, of July 6, amending the Economic and Fiscal Regime of the Canary Islands.

This three-year period must be counted from the date of accrual of the tax corresponding to the year in which the allocation (accounting) of the reserve occurs and said allocation in the case of natural persons may be:

  • at the close of the accounting period on December 31 of each year.

  • in the year following the year in which the profit is obtained.

The above determines that natural persons will have an effective period of three or four years to materialize the reserve for investments in the Canary Islands, depending on when they have made the accounting entry for the provision of the reserve (at the end of the financial year or in the following financial year). The design of the IRPF model responds to this duality (which does not occur in the case of Companies).

Information on provisions and realization made in 2024 of the reserve for investments in the Canary Islands corresponding to the years 2019 to 2024 and anticipated investments of future provisions will be provided according to the breakdown contained in the corresponding section of Annex A.2 of the declaration as follows:

Provisions and materializations made in 2024

  • Casillas [1681], [0733], [0735], [0738], [0742] and [0746]

    The amount of the provisions corresponding to income obtained in the Canary Islands from 2019 to 2024 that have been allocated to the RIC will be indicated.

  • Boxes [1682], [0734] [0789], [0792], [0794] and [0802]

    The year of the provision will be indicated (2019 to 2024) which, as previously mentioned, may be at the end of the financial year in which the net operating income was obtained or in the following financial year.

  • Boxes [1684], [0777], [0736], [0739], [0743], [0747] and [0750]

    The amount of the materializations made against the previously declared allocation in the investments provided for in letters A, B, B bis and D 1 of article 27.4 of Law 19/1994 will be indicated.

  • Boxes [1685], [0778], [0737], [0740], [0744], [0748] and [0751]

    The amount of the materializations made against the previously declared allocation in the investments provided for in letters C and D 2 to 6 of article 27.4 of Law 19/1994 will be indicated.

  • Boxes [0790], [0741], [0745] and [0749]

    The amount of each of the previously declared provisions that is pending materialization as of December 31, 2024, will be indicated.

Covid-19: Regarding the information to be provided regarding provisions and materializations of the RIC note that the ninth Additional Provision of Royal Decree-Law 11/2020, of March 31, by which urgent complementary measures are adopted in the social and economic field to face Covid-19, established that the prescription and expiration periods of any actions and rights contemplated in the tax regulations were suspended from March 14 (date of entry into force of Royal Decree 463/2020, of March 14, by which the state of alarm is declared for the management of the health crisis situation caused by Covid-19), until May 30, 2020.

Therefore, for the purposes of completing box [0790], please note that, in accordance with the above, with respect to the financial year 20 20 , if the reserve created with profits from 2020 was accounted for in that year 2020, the deadline to materialize the investment that ended on December 31, 2023 is extended by 78 days.  

Advance investments from future allocations to the reserve for investments in the Canary Islands, made in 2024

The information will be provided according to the following breakdown:

  • Box [0750].

    The amount of investments made in 2024 as early realization of future provisions under those provided for in Article 27.4 will be indicated. A, B, B bis and D 1, Law 19/1994.

  • Box [0751].

    The amount of investments made in 2024 as early realization of future provisions under those provided for in Article 27.4 will be indicated. C and D 2 to 6, Law 19/1994.

Covid-19: Please note, with regard to early investments of future provisions to the RIC made in previous years, that the Ninth Additional Provision of Royal Decree-Law 11/2020, of March 31, established that the prescription and expiration periods of any actions and rights contemplated in the tax regulations are suspended from March 14 (date of entry into force of Royal Decree 463/2020, of March 14, which declares the state of alarm for the management of the health crisis situation caused by Covid-19), until May 30, 2020.

For this reason, the deadlines for making the provision corresponding to the advance investments made in the 2019 financial year, whose provision deadline ended in the 2022 financial year, are extended to the 2023 financial year as a result of said extension, and those of the 2020 financial year are extended to the 2024 financial year.