The Canary Islands are a great laboratory and world reference in the design and operation of all the existing desalination technologies, with more than half a century of experience and the exploitation of more than 200 desalination plants.

That is why they are a perfect location to carry out R&D&i related to desalination, since we have excellent availability of desalination infrastructures, natural resources (sun, wind & sea) and an important group of high-qualified researchers, engineers and plant operators.

DESAL+ LIVING LAB INFRASTRUCTURE LOCATIONS

A key advantage to foreign R&D companies is that the Canary Islands is a low tax Special Zone (ZEC) created within the framework of the Canary Islands Economic and Tax Regime (REF) for the promotion of the economic and social development of the Islands and to diversify their production structure.

Within the list of economic activities included in the ZEC we can find: research and development (R+D) and water collection, treatment and supply from renewable resources, among others. Several tax benefits are included in our ZEC:

• • • • • 1) Corporate Income Tax: ZEC Entities are subject to the Corporate Income Tax in force in Spain, at the reduced rate of 4%. This special rate will apply to a maximum amount of the income tax, depending on the number of jobs created.

• • • 2) Income Tax Nonresident (IRNR) exemption: dividends paid by ZEC subsidiaries to parent companies resident in another country as well as the interest and other income from transfers to third parties of capital and capital gains from property, obtained without a permanent establishment are exempt from withholding.

• • • 3) Property Transfer Tax and Stamp Duty (ITP-AJD): ZEC entities are exempt from these taxes in the following cases:

– Acquisition of goods and rights for the activity development of the ZEC Entity in the geographical area of the ZEC.

– Corporate operations done by the ZEC entities, except their dissolution.

– Documented legal acts related to transactions of these entities in the geographical area of the ZEC.

• • • 4) Canary Islands General Indirect Tax (IGIC): in the ZEC the supply of goods and services done within ZEC entities, as well as imports of goods made by them, shall be exempt from taxation by the IGIC. It is similar in nature to VAT, although there are major differences such as the lower tax rates.

For further info on the tax advantages for ZEC entities, see this brochure.

For more information about the Canary Islands hub, visit:

https://canaryislandshub.com/

https://canariaszec.com/en/about-us/

https://bestingrancanaria.com/wp-content/uploads/2021/08/Folleto-Best-in-Gran-Canaria_2021_ENG.pdf