A. Deduction for investments in Spanish film productions and audiovisual series (art. 36.1 LIS)

Basis of deduction

The basis of the deduction will be constituted by the total cost of production, as well as the expenses for obtaining copies and the advertising and promotion expenses borne by the producer up to the limit for both of 40 percent of the production cost .

At least 50 per 100 of the base of the deduction 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 it.

The base of the deduction will be reduced by the amount of subsidies received to finance the investments that generate the right to deduction.

Deduction percentage and maximum deduction amount

a. Percentage

Investments in Spanish productions of feature films and short films and audiovisual series of fiction, animation or documentaries , which allow the preparation of a physical support prior to their serial industrial production, will entitle the producer or taxpayers who participate in the financing (investor), to a deduction that will be:

• Of 30 per 100 with respect to the first million base of the deduction.

• Of 25 per 100 on the excess of said amount.

b. Maximum deduction 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 the Royal Decree-Law 17/2020, of May 5, which approves measures to support the cultural and tax sector to address the economic and social impact of COVID-2019 (BOE of 6) and the CUD Order/ 807/2020, of August 27, which extends the term (BOE of the 31st)].

However, in the case of the investor , although he can apply the deduction on the contributions disbursed in each tax period under the same conditions as if the producer had applied it, the maximum amount of the same may not exceed , in terms of quota, the result of multiplying by 1.20 the amount of the amounts disbursed by it for the financing of that . The excess may be applied by the producer.

Note: The accreditation of the deduction by the investor will be incompatible, totally or partially, with the deduction to which the producer would be entitled.

Requirements

To apply the deduction established in this section, it will be necessary to meet the following requirements:

1. 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 jurisdiction in the matter.

   These certificates will be binding for the competent tax administration in matters of accreditation and application of the previous tax incentives and identification of the beneficiary producer, regardless of the moment of their issuance.

2. That a new and in perfect condition copy of the production be delivered to the Spanish Film Library or the film library officially recognized by the respective Autonomous Community.

In short:

Limits

The amount of this deduction, together with the rest of the aid received by the taxpayer, may not exceed 50 percent of the production cost . However, this limit is raised to:

• The 85 percent for short films.

• 80 per 100 for productions directed by a person who has not directed or co-directed more than two feature films qualified for commercial exploitation in cinema exhibition halls, whose production budget does not exceed 1,500. 000 euros.

• 80 per 100 in the case of productions shot entirely in one of the co-official languages other than Spanish that are projected in Spain in said co-official language or with subtitles.

• 80 percent in the case of productions directed exclusively by people with a degree of disability equal to or greater than 33 percent recognized by the competent body.

• 75 percent in the case of productions made exclusively by female directors.

• 75 per 100 in the case of productions with a special cultural and artistic value that need exceptional financing support according to the criteria established by Ministerial Order or in the corresponding calls for aid.

• 75 percent in the case of documentaries.

• 75 per 100 in the case of animation works whose production budget does not exceed 2,500,000 euros.

• 60 per 100 in the case of cross-border productions financed by more than one Member State of the European Union and in which producers from more than one Member State participate.

• 60 per 100 in the case of international co-productions with Ibero-American countries.