A. Deduction for investments in Spanish film productions (art. 36.1 LIS)
Deduction percentage and maximum deduction amount
With effect from 1 January 2020, investments in Spanish productions of feature films and short films and audiovisual fiction, animation or documentary series , which allow the creation of a physical medium prior to their serial industrial production will entitle the producer to a deduction:
- 30% of the first million of the deduction base.
- 25% of the excess amount.
The amount of this deduction may not exceed 10 million euros.
Please note that until January 31, 2021 will also be considered a commercial release of a film, without it losing its status as a cinematographic film as defined in article 4.a) of Law 55/2007, of December 28, the premiere that is carried out through television audiovisual communication services, as well as electronic communication services that broadcast television channels or program catalog services [article 10 of Royal Decree-Law 17/2020, of May 5, which approves support measures for the cultural sector and of a tax nature to face the economic and social impact of COVID-2019 (BOE of the 6th) and Order CUD/807/2020, of August 27, which extends the deadline (BOE of the 31st)].
Deduction base
The basis for the deduction will be the total cost of production, as well as the costs of obtaining copies and the advertising and promotion costs borne by the producer up to a limit for both of 40% of the cost of production.
At least 50% of the deduction base must correspond to expenses incurred in Spanish territory.
In the case of a co-production, the amounts will be determined, for each co-producer, based on their respective percentage of participation in the production.
To apply the deduction established in this section, the following requirements must be met:
- That the production obtains the corresponding certificate of nationality and the certificate that accredits the cultural character in relation to its content, its connection with the Spanish cultural reality or its contribution to the enrichment of the cultural diversity of the cinematographic works that are exhibited in Spain, issued by the Institute of Cinematography and Audiovisual Arts, or by the corresponding body of the Autonomous Community with competence in the matter.
- That a new and perfect copy of the production be delivered to the Spanish Film Library or the film library officially recognized by the respective Autonomous Community.
The deduction provided for in this section will be generated in each tax period for the production cost incurred in the same, although it will be applied from the tax period in which the production of the work ends.
However, in the case of animation productions, the deduction will be applied from the tax period in which the nationality certificate indicated in letter a') of article 36.1 of the LIS is obtained.
The basis for assessment will be reduced by the amount of any grants received to finance investments entitling the producer to this deduction.
In short:
| Deduction percentage | Maximum amount | Deduction base | |
|---|---|---|---|
| 30% | Up to €1 million |
€10 million Without exceeding the percentages indicated below |
Total cost of production together with costs of obtaining copies, advertising and promotion costs borne by the producer up to a limit of 40% of the cost of production. |
| 25% | On the excess of 1 million € | ||
Limits
The amount of this deduction, together with the rest of the aid received by the taxpayer, may not exceed 50% of the cost of production . However, with effect from 1 January 2020 , this limit is raised to:
- 85% for short films.
- 80% for productions directed by a person who has not directed or co-directed more than two feature films qualified for commercial exploitation in cinema theatres, with a production budget not exceeding 1,500,000 euros.
- 80% in the case of productions shot entirely in one of the co-official languages other than Spanish that are screened in Spain in said co-official language or with subtitles.
- 80% in the case of productions directed exclusively by people with a disability level equal to or greater than 33% recognised by the competent body.
- 75% in the case of productions made exclusively by female directors.
- 75% in the case of productions with special cultural and artistic value that require exceptional financial support according to the criteria established by Ministerial Order or in the corresponding calls for aid.
- 75% in the case of documentaries.
- 75% in the case of animated works with a production budget of no more than 2,500,000 euros.
- 60% in the case of cross-border productions financed by more than one Member State of the European Union and involving producers from more than one Member State.
- 60% in the case of international co-productions with Latin American countries.