Canary Islands Special Zone regulation

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Title V of Law 19/1994 (as amended by Royal Decree-Law 12/2006)

The Canary Islands Special Zone is a low tax zone created within the European Union. Among other benefits, the Zone enables companies to pay Corporate Income Tax at the rate of 4%, as opposed to the rate of 25-30% in force in the rest of Spain. Companies which decide to set up in the ZEC will also enjoy other tax benefits such as a low non- Resident Income Tax rate and full exemption from indirect tax for activities carried out within the geographical area of the ZEC. As ZEC Entities are located within Spain, Double Taxation Agreements signed by Spain apply to them, as well as the European Union Parent-Subsidiary Directive.

The Canary Islands Special Zone was authorised by the European Commission in January 2000 and by Royal Decree-Law 2/200, of 23rd June. It was later amended by Royal Decree-Law 12/2006, of 29th December, and implemented by Royal Decree-Law 1758/2007, of 28th December (Regulations of the Canary Islands Economic and Fiscal Regime).

The benefits provided by the Canary Islands Special Zone will initially remain in force until 31 December 2019, and this time frame may be extended on the authorisation of the European Commission.

• ORDER PERTAINING TO REGISTRATION
• Title V of Law 19/1994 (as amended by Royal Decree-Law 2/2000 and Royal Decree-Law 12/2006)