What the National Court ruled
The Reserve for Investments in the Canary Islands (RIC) is one of the most widely used — and most closely scrutinised — tax incentives available to companies in the archipelago. That is why any court ruling on how the tax authorities must behave when reviewing these allocations deserves attention. Spain’s National Court (Audiencia Nacional) has just handed down a ruling, dated 29 May 2026, that curbs an inspection practice more than one Canary Islands business owner may recognise.
The case concerned a Corporate Income Tax assessment for the 2010 tax year, relating to the RIC. The tax authorities had used an “information request” — a more informal procedure with fewer time-related safeguards than a formal inspection — to gather all the documentation they needed, only formally opening the inspection afterwards.
The National Court found that this amounted to an abuse of law: an attempt to circumvent the maximum time limits for inspection proceedings set out in Article 150 of Spain’s General Tax Law. By using the information request as a disguised inspection, the tax authorities effectively bought themselves time they were not entitled to. The consequence was decisive: the authorities’ right to assess the tax had become time-barred, and the assessment was annulled. The court did not even need to rule on the substantive question of whether the company could fund its RIC allocation with gains from property disposals, because the time-bar issue alone resolved the case.
Why it matters if your company allocates to the RIC
If your company has RIC allocations still pending investment, or has been subject to reviews relating to this incentive, this ruling is good news — and, more importantly, a useful tool. It confirms that there are clear limits on how much time the tax authorities can take to inspect, and that they cannot artificially extend that period by disguising an inspection as a simple information request.
In practice, this means that if, in any tax proceeding, you notice that the tax authorities used an information request to gather all of your company’s documentation before formally notifying you of the start of an inspection, there may be grounds to argue that the case has become time-barred, supported by this recent case law, which the National Court applies here.
What you can do
The first step is to review, together with your tax adviser, the actual timeline of any requests and actions taken by the tax authorities in any open or recent proceeding relating to Corporate Income Tax or the RIC. The timing — when the review actually began, when it was formally notified to you — can make the difference between a final assessment and one that is time-barred.
CLOSING: At EBF Consulting, we have spent years helping Canary Islands companies manage and defend their RIC allocations, and we know how important it is to scrutinise not just the substance of a tax review, but also its form and its timing. If you have an open proceeding or questions about how the timing of an RIC-related inspection has been handled, we would be glad to look at it with you.