The Reserve for Investments in the Canary Islands (RIC in Spanish) is along with the Canary Islands Special Zone (ZEC) one of the main incentives of the Canary Islands Economic and Fiscal Regime (REF in Spanish). The RIC is a tax advantage for companies located in the Canary Islands that enables considerably reductions on the direct taxation, with the overall aim to encourage investment, job creation and the diversification of the economy.
This tax incentive enables to have a reduction in the taxable base of the Corporate Tax of up to 90% of undistributed profit, through a special Reserve for Investments (RIC). The undistributed profit must come from establishments located in the Canary Islands, without it being possible, under any circumstances, for the application of the reduction to lead to a negative taxable base.
Since 2007, RIC funds can be invested in carrying out audiovisual productions in the Canary Islands that obtain the stamp of the Canarian Certificate of Audiovisual Work (1,2 y 3) a denomination granted by the Canarian Government subject to the prior compliance with a series of requirements that aim to guarantee such a condition.
The reserve must be materialized, among others, in one of the following investments:
• Acquisition of fixed assets.
• Subscription of stocks or 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.
• Technological research and development
• Subscription of securities bonds or annotations on account of the Canary Islands.
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.
(1) Decree 88/2019, of 22 May, amending Decree 18/2009, of 10 February, which creates the Canary Islands Registry of Audiovisual Companies and Works and governs the procedure to obtain the Canarian Audiovisual Work Certificate regarding feature films, short films, fiction series, animation or documentaries produced in the Canaries.
(2) Decree 18/2009, of 10 February which creates the Canary Islands Registry of Audiovisual Companies and Works and governs the procedure to obtain the Canarian Audiovisual Work Certificate regarding feature films, short films and fiction series, animation or documentaries produced in the Canary Islands.
(3) Order of 5 December 2016, amending Order 22 May 2015, on the criteria to qualify for the Canarian Audiovisual Work Certificate.