
Article 1 

1. By way of derogation from Articles 28, 30 and 110 TFEU, the Spanish authorities shall be authorised until 31 December 2027 to lay down, in respect of the products falling within the categories listed in Annex I that are produced locally in the Canary Islands, total exemptions from or partial reductions in the tax known as ‘Arbitrio sobre las Importaciones y Entregas de Mercancías en las islas Canarias’ (‘AIEM tax’). Those exemptions or reductions shall form part of the strategy for economic and social development of the Canary Islands and contribute to the promotion of local activities.
2. Application of the total exemptions or of the partial reductions referred to in paragraph 1 shall not lead to differences in excess of 15 % for the products falling within the categories listed in Annex I.The Spanish authorities shall ensure that the exemptions or reductions applied to the products do not exceed the percentage strictly necessary to maintain, promote and develop local activities. The authorised tax differential shall not exceed the proven additional costs.
3. The fiscal advantage shall apply subject to a limit of EUR 150 million per annum, except in duly justifiable cases.
Article 2 

1. The Spanish authorities shall select the products referred to in Article 1(1) taking into account the following criteria:
(a) local production exists and its share of the local market accounts for at least 5 %;
(b) significant importation of goods (including from mainland Spain and other Member States) exists which could jeopardise the continuation of local production, and its share of the local market accounts for at least 10 %;
(c) additional costs exist which increase the costs of local production in comparison with products produced elsewhere, compromising the competitiveness of products produced locally.
2. The Spanish authorities may derogate from the market share thresholds referred to in points (a) and (b) of paragraph 1 in duly justified circumstances, which include:
(a) labour-intensive production;
(b) production which is otherwise of strategic importance for local development;
(c) production subject to periodical fluctuations;
(d) production located in particularly disadvantaged areas;
(e) production of medical products and personal protective equipment required to address health crises.
Article 3 
By 1 January 2021, the Spanish authorities shall communicate to the Commission the initial list of products to which exemptions or reductions are applied to. Those products shall fall within the product categories set out in Annex I. Amendments to this list of products may be made by the Spanish authorities, provided that the Commission is notified of all the relevant information.
Article 4 
By 30 September 2025 at the latest, the Spanish authorities shall submit a monitoring report to the Commission to enable it to assess whether the conditions justifying the authorisation set out in Article 1 continue to be fulfilled. The monitoring report shall contain the information set out in Annex II.
Article 5 
This Decision shall apply from 1 January 2021.
Article 6 
This Decision is addressed to the Kingdom of Spain.
Done at Brussels, 16 November 2020.
For the Council
The President
M. ROTH
ANNEX I

Agriculture, livestock farming, forestry and fisheries

0203 0204 0207 0407 0603 0701 0703 0706 0708 0810Mining and quarrying

2516 6801 6802 6810Building materials

2523 3816 3824 6809 7006 7007 7008 7009 7010Chemicals

2804 2807 2811 2828 2853 3102 3105 3208 3209 3212 3213 3214 3304
3401 3402 3406 3814 3917 3920 3923 3925 4012    Metal-working industries

7308 7309 7604 7608 7610 8415 8424 8907 9403 9404 9406Food and beverage industry

0210 0305 0403 0406 0901 1101 1102 1601 1602 1702 1704 1806 1901
1902 1904 1905 2002 2005 2006 2007 2008 2009 2103 2105 2106 2201
2202 2203 2204 2208 2309        Tobacco
2402
Textiles, leather and footwear

6109 6112Paper

4808 4811 4818 4819 4821 4823Graphic arts

4909 4910 4911
ANNEX II
1. 
That report shall contain the summary results of detailed ad hoc studies on additional costs that Spain shall continue conducting periodically.

2. Other subsidies. The Spanish authorities shall send a list of all other aid and support measures addressing the additional operating costs of economic operators linked to the outermost region status of the Canary Islands.

3. 

Table 1
Year 2019 2020 2021 2022 2023 2024 Notes
Foregone tax revenue       
Tax receipts – imports       
Tax receipts – local production       





Notes to Table 1:
4. 

Table 2
Year 2019 2020 2021 2022 2023 2024 Notes
Regional gross value added       

— In the supported sectors       
Overall regional employment       

— In the supported sectors       
Number of active enterprises       

— In the supported sectors       
Price level index – mainland       
Price level index – region       



Notes to Table 2:
5. 

Table 3
Identification of products and rates applied
Supported products – CN code (4, 6, 8 or 10 digits) Year CN4 approved category Code specifications External tax rate Internal tax rate Tax differential applied Notes
 2019      
 2020      
 2021      
 2022      
 2023      
 2024      






Notes to Table 3:

Table 4
Market share of supported products
Supported products – CN code (4, 6, 8 or 10 digits) Year Volume Value (in EUR) Notes
  local production unit imports Market share local production imports Market share 
 2019        
 2020        
 2021        
 2022        
 2023        
 2024        





Notes to Table 4:
6. 


7. 

