New regulations for 2023

Main tax changes introduced by Law 31/2022, of December 23, on the General State Budget for 2023

de Presupuestos Generales del Estado para el año 2023.(BOE, 24-diciembre-2022)

CORPORATION TAX

With effect from January 1, 2023 , the following modifications are introduced in Law 27/2014, of November 27, on Corporate Tax (LIS):

• The type of tax

  With effect from January 1, 2023 and indefinite validity, article 29 of the LIS is modified by article 68 of the LPGE for 2023.

  A reduced tax rate of 23 percent is introduced for entities whose net turnover for the immediately preceding tax period is less than €1 million.

  For these purposes, the net amount of the turnover will be determined in accordance with the provisions of sections 2 and 3 of article 101 of the LIS .

• Accelerated depreciation of certain vehicles

  A new eighteenth Additional Provision is added to the LIS by article 69 of the LPGE for 2023, by virtue of which,

  Investments in new vehicles FCV , FCHV , BEV , REEV or PHEV , as defined in Annex II of the General Vehicle Regulations, approved by Royal Decree 2822/1998, of December 23 , affected by economic activities and that come into operation in the tax periods beginning in the years 2023, 2024 and 2025, may be amortized based on the coefficient resulting from multiplying by 2 the maximum linear amortization coefficient provided for in the officially approved amortization tables .

• Special tax regime of the Balearic Islands

  The Seventieth Additional Provision of the LPGE for 2023 introduces the Special tax regime of the Balearic Islands with effect for tax periods beginning between January 1, 2023 and December 31, 2028 .

  • Section Four. Reserve for investments in the Balearic Islands :

    1. Taxpayers of the Corporate Tax and the Non-Resident Income Tax will have the right to a reduction in the tax base of the amounts that, in relation to their establishments located in the Balearic Islands, they allocate from their profits to the investment reserve in accordance with the provisions of this section.

    2. The reduction will be applied to the contributions that in each tax period are made to the reserve for investments up to the limit of 90 percent of the part of the profit obtained in the same period that is not subject to distribution, as far as it comes from establishments located in the Balearic Islands.

    In no case may the application of the reduction determine that the tax base is negative.

    (...)

    4. The amounts allocated to the reserve for investments in the Balearic Islands must be materialized within a maximum period of three years counted from the date of accrual of the tax corresponding to the year in which it was provided, in the realization of any the investments indicated in this number.

    5. The assets in which the investment is materialized must be located or received in the Balearic archipelago, used therein, affected and necessary for the development of economic activities of the taxpayer , except in the case of those that contribute to the improvement and protection of the environment in the Balearic territory.

    (...)

    10. The taxpayers referred to in this section may make advance investments, which will be considered as materialization of the investment reserve that is provided from profits obtained in the tax period in which the investment is made or in the three subsequent periods, provided that the remaining requirements demanded in the same are met.

    The materialization and its financing system will be communicated jointly with the declaration of the Corporate Tax, the Non-Resident Income Tax or the Personal Income Tax of the tax period in which the advance investments are made .

    11. The application of the benefit of the investment reserve will be incompatible , for the same assets and expenses, with the deductions to encourage the performance of certain activities regulated in Chapter IV of Title VI of Law 27/2014, of November 27, on Corporate Income Tax. It will also be incompatible for the same goods and expenses with any tax benefit or measure of a different nature that has the status of state aid under European Union law, if said accumulation exceeds the limits established in the Community legislation that, in each case, are applicable.

    (...)

    13. Personal Income Tax taxpayers who determine their net income using the direct estimation method will be entitled to a deduction in the full quota for the net operating income that is allocated to the reserve for investments , as long as these come from economic activities carried out through establishments located in the Balearic Islands .

    In order to benefit from the reserve for investments in the Balearic Islands, natural persons must keep accounting records in the manner required by the Commercial Code and its implementing regulations from the year in which the profits that are intended to provide the reserve for investments in the Balearic Islands were obtained until the year in which the assets that are the object of the investment must remain in operation.

    The deduction will be calculated by applying the average tax rate to the annual contributions to the reserve and will be limited to 80 percent of the part of the full quota that proportionally corresponds to the amount of the net operating income that comes from establishments located in the Balearic Islands, provided that the limits established in the Community Regulations that, in each case, are applicable are not exceeded.

    (...)

  • Section Five. Special regime for industrial, agricultural, livestock and fishing companies .

    1. Taxpayers of Corporate Tax and Non-Resident Income Tax will apply a bonus of 10 percent of the full quota corresponding to the income derived from the sale of tangible assets produced in the Balearic Islands by themselves. , typical of agricultural, livestock, industrial and fishing activities , in the latter case in relation to the catches made in its fishing and aquaculture zone. Those persons or entities domiciled in the Balearic Islands or in other territories that are dedicated to the production of such goods in the archipelago, through a branch or permanent establishment, may benefit from this bonus.

    2. The above bonus will also apply to Personal Income Tax payers who carry out the same activities and with the same requirements demanded of Corporate Tax payers, provided that they determine the income by the direct estimation method.

    The bonus will be applied to the part of the full quota that proportionally corresponds to the income derived from the production activities indicated .

    3. The application of the bonus in each tax period will require that the average workforce of the entity in said period is not less than the average workforce corresponding to the twelve months prior to the beginning of the first tax period in which the regime provided for in this section takes effect.

    When the entity has been established within the aforementioned period of twelve months, the average workforce resulting from that period will be taken into account.

    4. The bonus will increase up to 25 percent in those tax periods in which, in addition to meeting the requirement provided for in the previous number, there has been an increase in the average workforce not less than the unit with respect to the average workforce of the previous tax period and said increase is maintained for at least a period of three years from the end date of the tax period in which this increased bonus is applied.

    (...)

    6. When the entity has been established in the first tax period in which the regime provided for in this section takes effect, the application of the bonus will require that said entity meets the requirements for the application of the reduced tax rate for newly created entities regulated in article 29.1 of Law 27/2014, of November 27, on Corporate Tax . In this case, the rules set out in this number will be followed.

    7. The bonus regulated in this section will not be applicable to the income derived from the sale of tangible goods produced in the Balearic Islands related to shipbuilding, synthetic fibres, the automobile industry, steel and coal industry activities.

• Special Economic and Tax Regime of the Canary Islands

  The seventh Final Provision of the LPGE for 2023 modifies Law 19/1994, of July 6, modifying the Regime Economic and Fiscal of the Canary Islands with effects for tax periods beginning on January 1, 2023.

  • Section One . A new wording is given to article 42.

    1. The entities of the Canary Islands Special Zone will pay Corporate Tax with the following specialties :

    (...)

    c) Taxpayers who carry out the operations of trade in goods referred to in letter a) (ii) of section 1 of article 44 of this law, must subscribe quarterly an informative declaration of operations with goods carried out outside the Canary Islands Special Zone. where the origin and destination of the goods, the type of goods, quantity and other required information will be stated, in accordance with the Union customs code and other applicable regulations. They must also keep a record of the corresponding customs documentation. By Order of the head of the Ministry of Finance and Public Function, the informative declaration and the requirements of the record book of operations with goods carried out outside the scope of the Canary Islands Special Zone will be approved.

  • Section Two.New wording is given to article 44.

    A new wording is given for the purposes of determining the part of the tax base of the entity of the Canary Islands Special Zone that, for the purposes of the application of the special type of tax, is derived from the operations carried out materially and effectively in the geographical scope of the Canary Islands Special Zone.