The Reserve for Investments (RIC) is one of the main incentives of the Canary Islands Economic and Fiscal Regime (REF in Spanish).
The RIC is a tax advantage for companies and Individuals located in the Canary Islands that enables reductions on the direct taxation (up to 90% of profits). for example a Self Employed person making €100,000 profit from invoicing from the Canary Islands would enjoy a tax break of up to 90% on those profits. The remaining 10% would be taxed at the applicable rate in this case 25%. Overall lowering the tax on profits to just 2.5% meaning Tenerife and Gran Canaria offer better tax incentives than Malta and Cyprus.
The reserve must be materialized, among others, in one of the following investments:
• Acquisition of fixed assets directly relating to the business activity.
• Subscription of shares in the capital of companies that invest in the Canary Islands.
• Investment in venture capital investment funds and companies that reinvest in the Canary Island economy.
• Acquisition of share in ZEC Companies.
• Technological research and development.
• Subscription of securities bonds or annotations on account of the Canary Islands Government.
This maximum period for this materialization of the investment is 3 years, from the date of the accrual of the tax corresponding to the financial year of the provision. The investment made must be held for a minimum period of 5 years which can then be dissolved with no further tax implications on the amount invested.
For more information or for a list of CIC’s RIC investments contact email@example.com