Bill would let triangular trading firms keep the ZEC tax break

Automatic summary, not yet reviewed

1. The bill would amend Article 44.1.a) of Law 19/1994 on the Canary Islands Economic and Fiscal Regime, so that triangular or trading operations of companies in the Canary Islands Special Zone (ZEC) can again qualify for the reduced tax rate.
2. A sale of goods that never physically pass through the Canary Islands would count as carried out in the ZEC if it is organized, directed, contracted and invoiced from there, and if at least 50% of the expenses (excluding the purchase, the sale, and transport and traffic of the goods) correspond to the entity's staff and resources located in the Canary Islands.
3. Operations carried out, directly or indirectly, with persons or entities in non-cooperative jurisdictions, or payments routed through them, could not qualify for the ZEC.
4. The change would apply to tax periods starting from each company's registration in the Official Register of ZEC Entities, and the law would take effect the same day it is published in the Official State Gazette.

Who it affects

• Companies registered in the Canary Islands Special Zone doing wholesale trade without goods passing through the islands, about 120 according to the text.: They could again pay the reduced rate on these operations if they meet the new requirements.
• Workers at these companies in the Canary Islands.: The bill aims to protect the jobs tied to this activity, which the text puts at 500 to 750 positions.
• Operations involving tax havens or non-cooperative jurisdictions.: They are excluded from the ZEC special regime.

Words worth knowing

Zona Especial Canaria (ZEC)

A special tax regime for companies set up in the Canary Islands, with reduced rates if they meet conditions.

Comercio triangular o trading

Buying and selling goods that never physically pass through the Canary Islands, run from ZEC companies.

Tipo reducido

A lower tax rate than the standard one, available to ZEC companies.

Jurisdicciones no cooperativas

Territories that do not cooperate on tax matters, commonly known as tax havens.

Periodo impositivo

A company's fiscal year, the period to which the tax applies.

It summarizes the text as it was introduced. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries