Spain: Government Announces Two Major Tax Incentives To Complete Balearic Islands’ Special Regime

Spain’s Prime Minister Pedro Sánchez visited the facilities of the company CAROB S.A., in the Mallorcan municipality of Marratxí. Accompanied by the president of the Balearic Government, Francina Armengol, he announced the approval of two new tax incentives to complete the Balearic Islands’ Special Regime and promote the strengthening and economic transformation of the islands.

“With these two new tax incentives we are completing the Balearic Islands’ Special Regime and we are giving a fair and legitimate response to the citizens of the Balearic Islands, who see their territorial diversity recognised in their tax system”, said Sánchez, who specified the two tax measures included in the draft General State Budget for 2023.

Firstly, the Reserve for investments in the Balearic Islands (RIB) will reduce corporation tax and non-resident income tax by up to 90% of the taxable base when profits are used to finance productive investment and job creation. Likewise, the PGE will establish a 10% rebate – that may reach 25% where there is an increase in the workforce – for the sale of tangible goods produced in the Balearic Islands and derived from agricultural, livestock, industrial and fishing activities.

“When we talk about the tax model of our countries, we talk about the welfare state we want; and Spain and the Balearic Islands want to compete to strengthen our welfare state and not contribute to its weakening and dismantling”, Pedro Sánchez stressed.

During his visit to CAROB S.A., the prime minister of the Government of Spain acknowledged the work carried out by the company and highlighted its commitment to sustainability, reindustrialisation, job creation and job training. “You are an example of inspiration and of the entrepreneurial spirit of our country’s businessmen and women,” he said.

At the same time, Pedro Sánchez underlined the Government’s commitment to infrastructures and mobility in the Balearic Islands and announced an investment of 20 million euros to finance the Palma tram, a sustainable metropolitan transport project that will improve and modernise the public transport system in the Balearic capital.