Through Decree-Law No. 12/2021, the Autonomous Community of the Canary Islands adopted several taxes, organizational, and management measures following the volcanic eruption on the island of La Palma to maintain the stability recovered by Spanish taxpayers.
1. Extension of the deadline for self-assessment
The regulation states that the taxpayers of the Canary Islands General Indirect Tax or the Arbitrio sobre Importaciones y Entregas de Mercancías en las Islas Canarias, with tax domicile or main permanent establishment in La Palma, may file until January 31, 2022, the self-assessment corresponding to the third quarterly settlement period of the year 2021.
Likewise, those who are obliged to file monthly periodic self-assessments must file until December 31, 2021, the self-assessment corresponding to the settlement period of September 2021, and until January 31, 2022, the self-assessment corresponding to the settlement period October 2021.
It is important to point out that, for these regulations, the main permanent establishment will be understood as the place where the administrative management and the direction of its business in the Canary Islands are effectively centralized.
2. Extension of the due dates of tax debts
Exceptionally and concerning the deferred tax debts whose payment term had not expired on September 19, 2021, the taxpayer with tax domicile or main permanent establishment in La Palma may request an extension of six months of the expiration date of the aforementioned term.
Likewise, concerning the tax debts for which payment in installments has been granted, the aforementioned taxpayer may request the extension of six months from the date of each of the expiration dates of the terms pending on the date of entry into force of this Decree-Law.
3. Application procedure
In the case of a supposed deferral, the request for an extension must be presented before the expiration of the payment term stated in the agreement by which the deferral was granted; in the case of tax debt in installments, the request must be presented before the expiration of any of the terms granted in the agreement, with the authorization taking effect on all the payment terms that have not expired.
It is important to point out that the presentation of the request will automatically imply the extension of the expiration of the payment term or terms under the terms established in this article, without the need for an express resolution of the body that issued the agreement granting the deferral or installment payment.
4. Zero tax on Property Transfer Taxes
The regulation states that a zero rate will be applied to transactions subject to Transfer Tax and Stamp Duty, which accrued before December 31, 2026, for the following items:
- For the concept Stamp Duty, the first copies of public deeds documenting:
- The transfer of real estate that, under the provisions of this Decree-Law, are taxed at zero rates in the Canary Islands General Indirect Tax.
- The constitution or extension of loans and credits with mortgage guarantee granted to the persons, natural or juridical, who have lost real estate as a consequence of the volcanic eruption.
- For the concept Patrimonial Transmissions Onerous, for the transfers of real estate and vehicles in which the same requirements demanded in the present Decree-Law concur, for the application of the zero rates of the Canary Islands General Indirect Tax to the delivery of real estate and vehicles.
5. Inheritance and Gift Tax rebates
The tax liability corresponding to the donation of an amount in cash, which accrues before December 31, 2026, will be reduced by 100%, provided that the following conditions are met:
- The donee is the owner, usufructuary or bare owner of a property that has been destroyed by the action of lava, whose existence and ownership must be accredited by any means of proof admitted in law.
- The amount in cash donated must be destined for the acquisition or construction of a property located on the island of La Palma, which must have the same purpose as the destroyed property.
- The acquisition of the property must be carried out within two years from the accrual of the tax levied on the donation. If there are successive donations for the same purpose, the term will begin to be counted from the accrual of the first donation.