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The government of the Canary Islands has published a COVID line of direct grants for the self-employed and businesses to mitigate the effects of COVID. This public grants scheme forms part of Royal Decree 5/21, which sets out to provide companies and the self-employed with EUR 7,000 million in public grants.

What does the grant consist of?

The grant consists of a sum of money which must be exclusively used to pay off debt and make payments to suppliers and other creditors, financial or non-financial, and the fixed costs incurred by the party applying for the grant, provided the payments accrued between 1 March 2020 and 31 May 2021, in relation to contracts prior to 13 March 2021.

These finalist grants include the following line classifications:

  • Line 1: Autonomous persons (entrepreneurs or professionals) paying taxes on the objective-estimate personal income tax system.
  • Line 2: Autonomous persons (entrepreneurs or professionals), companies and groups of companies whose annual volume of operations declared or verified by the authorities for Canary Island general indirect tax (IGIC) and, where applicable, value-added tax (VAT), fell by more than 30% in 2020 with respect to 2019.
  • Line 2.1: Autonomous persons, companies and groups of companies with a maximum of 10 employees.
  • Line 2.2: Autonomous persons, companies and groups of companies with more than 10 and fewer than 50 employees.
  • Line 2.3: Autonomous persons, companies and groups of companies with 50 employees or more.

What are the specifications in the Canary Islands with respect to RD 5/2021?

In connection with the utilisation of grants, the Canary Islands extend the scope to all economic sectors operating in the islands (except finance companies), in consideration of the ultra-dependence of the Canary Islands' production fabric on the tourism sector and its virtual immobilisation during the period of pandemic.

Also, in connection with the amount of the grant, unlike RD 5/2021, the maximum limit of the grant is extended to entrepreneurs, professionals and other organisations applying the direct-estimate system, depending on the number of employees.

What requirements must I satisfy?

Beneficiaries of the grants must meet the following requisites:

  • They must be registered for tax purposes in the Canary Islands (with the exception of the scenarios stipulated in Article 3.4 of RD 5/20211).
  • They must be registered for one of the activities stipulated in the CNAE09 codes in 2019, 2020 and 2021, with the exception of the following:
  • Sección K: Financial activities and insurance.
  • Subsector 9700 of Section T (Household activities as employers and producers or goods and services for own use): “Household activities as employers of domestic staff”.
  • Section U: Activities of extraterritorial organisations and bodies.


  • They must still be carrying out the activity at the time of the application.
  • Downturn of more than 30% in their annual volume of business declared or verified by the authorities, in VAT or equivalent indirect tax in 2020, with respect to 2019.
  • They must not have been convicted on a firm ruling barring them from obtaining subsidies or public grants or for offences relating to prevarication, bribery, misappropriation of public funds, influence peddling, fraud and illegal collection of funds or urban development offences.
  • They must not, for any proceedings in which they have been found guilty, have given rise to the definitive termination of any contract drawn up with the authorities.
  • They must be up to date with the payment of their obligations in relation to refunds of subsidies or public grants.
  • They must be up to date concerning compliance with their tax and social security obligations.
  • They must not have requested voluntary bankruptcy proceedings, they must not have been declared insolvent in any proceedings, they must not be in bankruptcy, unless an agreement has been reached in such proceedings, they must not be subject to judicial proceedings or have been declared ineligible.
  • They must not have tax residence in a country or territory officially classified as a tax haven.

In addition to these requisites, the beneficiaries of the grants must undertake the following obligations:

  • Notify the issuing body of any changes in the circumstances and subjective and objective requisites taken into consideration for approval of the subsidy.
  • Comply with the obligations laid down in Article 14 of Law 38/2003, on general subsidies.
  • Continue the activity corresponding to the grants up to 30 June 2022.
  • Refrain from distributing dividends in 2021 and 2022.
  • Refrain from approving any increases in the remuneration of senior management over a period of two years following the application of certain measures referred to in Royal Decree-Law 5/2021.

Furthermore, the self-employed and companies affected by the following circumstances may not be considered as beneficiaries: (i) A public company or another held through its equity or its governance bodies mainly by public authorities or organisations depending on same; (ii) They have declared net negative earnings on personal income tax for 2019 or, where applicable, a negative result in that year in the tax base for corporation tax or non-resident income tax, prior to application of the reserve for capitalisation and offsetting of tax loss carryforwards, unless the recipient is affected by any of the circumstances in Article 3.2 section b) and can demonstrably attest to this; and (iii) They were in crisis at 31 December 2019 as per the provisions of Article 2.18 of the General Regulation of Exemption by Categories, with the exception of microenterprises or small businesses already in crisis at 31 December 2019, provided they are not undergoing bankruptcy proceedings or have received salvage or restructuring assistance.

How much is the grant?

The amount of the grant will be equivalent to the total of any subsidisable expenses applied for on the form, in due consideration of the following thresholds, depending on the type of beneficiary:

  • For Line 1 beneficiaries the amount of the grant will be a maximum of EUR 3,000.
  • For Line 2 beneficiaries the minimum amount of the grant cannot be less than EUR 4,000 and, in connection with the maximum amount, the following will be applicable:
  • For Line 2.1 beneficiaries the maximum grant to be allocated will be 100% of the downturn in business in 2020 with respect to 2019 exceeding 30%, provided this amount does not exceed EUR 500,000.
  • For Line 2.2 beneficiaries the maximum grant to be allocated will be 90% of the downturn in business in 2020 with respect to 2019 exceeding 30%, provided this amount does not exceed EUR 1,800,000.
  • For Line 2.3 beneficiaries the maximum grant to be allocated will be 80% of the downturn in business in 2020 with respect to 2019 exceeding 30%, provided this amount does not exceed EUR 5,000,000.

What documentation will I be asked for in the application?

During proceedings for the application, the autonomous community's authorities will demand presentation, along with the form, of the following documents to substantiate the statements of the applicant:

  1. In cases in which the application is submitted by a representative, documentation attesting to representation.
  2. Document attesting to registration in the Canary Islands' economic-financial and logistics system third-party database (SEFLogiC).
  3. Persons or companies applying that comply with the exceptions stipulated in Article 3.3 b.1) of the Canary Islands' Official Gazette:
  4. - Certificate summarising the annual declaration of personal income tax, corporation tax or non-resident income tax for the year 2018, issued by state tax agency AEAT.

    - Responsible declaration confirming that net negative earnings in 2019 were due to impediments or limitations of normal activity for extraordinary reasons such as catastrophes, plagues, serious damage to crops, livestock or agricultural and livestock facilities, constructions or causes unrelated to the usual business of the company, bankruptcy of tour operators, with details of the specific causes.

  5. In the case of entrepreneurs or professionals and companies created or incorporated between 1 January and 31 March 2020 paying taxes on the objective-estimate personal income tax system must furnish the tax return or registration with this system. Other applicants must furnish either the direct-estimate declarations of personal income tax, corporation tax or non-resident income tax for 2020 or, alternatively, the annual accounts showing losses in 2020.
  6. Individual applicants exclusively carrying out leasing activities with buildings exempt from IGIC Canary Islands tax must furnish documentation attesting to the volume of operations in respect of IGIC and, where, applicable, VAT in 2019 and 2020.
  7. For the rest of the additional documentation, authorisation may be granted to the tax authorities, social security or other public bodies or authorities to consult the data required in the public notice, and in this case the applicant would not be obliged to furnish any additional documentation during this phase.

If no authorisation to consult this information, the applicant must provide the following additional documentation:

  • For Line 1 beneficiaries:
  • Certificate of census situation by the state tax agency attesting to the tax residence, economic activity in 2019, 2020 and 2021, and the dates of registration of activities.
  • Summarised certificate of the annual personal income tax return issued by the state tax agency or annual personal income tax return for 2019 and 2020 to attest to application of the objective-estimate personal income tax system in 2019 or 2020.
  • Certificates attesting to compliance with tax obligations and social security obligations or, where applicable, with the professional mutual benefit fund.


  • For Line 2 applicants:
  • Certificate of census situation by the state tax agency attesting to the tax residence or, for applicants not resident in Spain, accreditation of operation through a permanent establishment in the Canary Islands; economic activity in 2019, 2020 and 2021, and the dates of registration of activities.
  • Accreditation of the annual volume of business declared or verified by the authorities, Canary Islands tax and, where applicable, VAT in 2019 and 2020.
  • When the individual or company applying for the grant is resident for tax purposes in the Cities of Ceuta or Melilla or exclusively carries out operations which entail no obligation to present a periodic self-assessment for Canary Islands tax/VAT, they must furnish:
      • For those liable for personal income tax, a summarised certificate of the annual personal income tax return for 2019 issued by the state tax agency, and self-assessments of payments by instalments for 2020 (form 130).

      • For those liable for corporation tax or non-resident income tax with a permanent establishment, the last instalment for the years 2019 and 2020 respectively, if the instalments are calculated pursuant to the provisions of Article 40.3 of Corporation Tax Law 27/2014 of 27 November (form 202).

  •  Accreditation of the number of people employed in 2020 or, alternatively, the report of the average headcount in 2020 issued by social security.
  • Certificate of personal income tax/corporation tax/non-resident income tax from the AEAT tax agency stating net negative earnings.
  • Certificate of census situation by the state tax agency attesting to the date of registration in the census of entrepreneurs, professionals and withholders or, where applicable, in the census of entrepreneurs or professionals (certificate of tax status by the Canary Islands tax agency) and, if registration or deregistration occurred in 2019 or 2020, information on the dates of registration and deregistration in these censuses, and reason for deregistration.
  • If the grant has been applied for in several autonomous communities, the applicant must furnish the annual summarised declaration of withholdings and prepayments (form 190) for 2020.
  • Certificates attesting to compliance with tax obligations and social security obligations or, where applicable, with the professional mutual benefit fund.

When the deadline for submitting applications has expired, the competent body will check compliance with all the requisites to be a beneficiary in accordance with the information and the data obtained by the authorities or any furnished by the party concerned.

The following is stipulated in relation to the order of resolution of applications:

  • Firstly, applications will be resolved in relation to Lines 1 and 2.1.
  • The subsidy for both lines will be approved, until the credit available has been exhausted, pursuant to the date of submission of any complete applications for subsidies or, if they are not complete, to the date on which they gather all the documentation required, when this has been rectified.
  • If, when all the complete applications have been resolved, any credit remains on these lines, it will be added to the credit available for Lines 2.2 and 2.3
  • Subsequently, Lines 2.2 and 2.3 will be resolved.
  • If the credit available fails to cover all the complete applications, the complete applications will be considered in strict chronological order until all the credit has been exhausted.
  • If the credit available covers all the complete applications, or if the limits are extended as defined in Article 13.4 b) of the Official Gazette, all the complete applications will be considered.

How is my grant justified when it is approved?

The beneficiaries of the grant must make their justification between 1 January and 28 February 2022.

Justification proceedings vary depending on the type of beneficiary:

  • Line 1 beneficiaries: justification will take the form of a responsible declaration by the beneficiary in accordance with the standardised specimen available in the procedure on the website of the public administration of the Autonomous Community of the Canary Islands and, where applicable, a letter of payment of a refund in the event of funds received and not applied, and any interest arising from them.
  • Line 2 beneficiaries who have received a grant equivalent to the minimum amount of EUR 4,000: will not be required to produce any justification other than accreditation of the requisites established to be eligible as a beneficiary.
  • Line 2 beneficiaries who have received a grant exceeding EUR 4,000 and up to EUR 100,000: will provide justification by means of the simplified justificatory account, which will contain the following information:
  • Responsible declaration of the classified list of the payments made to satisfy payments pending to suppliers and creditors, debts and fixed costs incurred and not covered, with identification of the creditor and of the document, the amount, date of issue and date of payment, pursuant to the standardised specimen which will be available in the procedure on the website of the public administration of the Autonomous Community of the Canary Islands.
  • A breakdown of any other income or subsidies that have financed the activity subsidised, with an indication of the amount and origin.
  • Where applicable, letter of payment of a refund in the event of any remainders not applied, and the interest they carry.


  • Line 2 beneficiaries who have received a grant exceeding EUR 100,000: will provide justification by means of the simplified justificatory account with an auditor's report, which must contain the following information:
  • A classified list of the payments made to satisfy payments pending to suppliers and of financial and non-financial debt and the amount of fixed costs not covered, equivalent to losses during the subsidisable period, pursuant to the standardised specimen.
  • A breakdown of any other income or subsidies that have financed the activity subsidised, with an indication of the amount and origin.
  • Where applicable, letter of payment of a refund in the event of any remainders not applied, and the interest they carry.
  • Result of a check by the auditor of a sample of receipts which furnish reasonable evidence of proper application of the subsidy.


The scope of the audit must adapt to the provisions of Article 18 of the Canary Islands Official Journal.

What is the deadline, and how can I apply for the grant?

Applications may be submitted between 15 June and 28 July 2021, both inclusive.

Applications along with the documentation required will be submitted in telematic format only pursuant to the standardised specimen applications posted on the website of the public administration of the Autonomous Community of the Canary Islands for the beneficiaries of Line 1 and Line 2.

For more information on the public grants scheme, go to the Official Gazette of the Canary Islands for details of the notice posted.



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