C. Deduction for production of certain live shows (art. 36.3 LIS)
Regulations: see also art. 39.7 LIS
Producers: taxpayers who carry out the production and exhibition of certain live performing arts and musical shows.
Financiers: Since January 1, 2021, this deduction is allowed to be applied, under the same conditions as the producers who generate the right to it, entrepreneurs or professionals, who participate in the financing of the production and exhibition of live shows of performing and musical arts when the following circumstances occur:
Contribute amounts as financing to cover all or part of the direct artistic and technical costs of the production as well as the advertising and promotion expenses borne by the producer up to a limit of 30% of the production costs.
When the financing must be provided:
The amounts intended to finance production costs may be contributed at any stage of production, prior to or after the moment in which the producer incurs the aforementioned production costs until the certificate is obtained. referred to in letter a) of section 3 of article 36 of the LIS .
The amounts intended to finance expenses for obtaining copies, advertising and promotion by the producer may be contributed prior to or after the moment in which the producer incurs the aforementioned expenses, but never after of the tax period in which the producer incurs them.
They do not acquire intellectual or other property rights regarding the results of production, whose property must in all cases belong to the producer.
They are not linked , within the meaning of article 18 of the LIS , with the taxpayer who generates the right to deduction (the producer).
Important : the producer and the taxpayers who participate in the financing ( financiers ) of the production must sign one or more financing contracts, which may be signed at any stage of the production, It is necessary that both communicate to the Tax Administration prior to the end of the tax period in which the latter (producer) has the right to apply the deduction this circumstance, providing both the signed financing contract and the certifications of compliance with the requirements set out in article 36.3 for the application of the deduction.
To carry out this communication regulated in art. 39.7 LIS the management “ Presentation of communication regulated in article 39.7 LIS ” has been created in the electronic headquarters of the State Tax Administration Agency .
Percentage of deduction
Expenses incurred in the production and exhibition of live performing and musical arts shows will have a deduction of 20 per 100 .
Basis of deduction
The basis of the deduction will be constituted by the direct costs of an artistic, technical and promotional nature incurred in the aforementioned activities.
This base of this deduction will be reduced in the amount of the subsidies received to finance the expenses that generate the right to it.
Maximum deduction amount
For the producer: The deduction generated in each tax period may not exceed the amount of 500,000 euros per taxpayer .
For the financier: Although you can determine the amount of the deduction under the same conditions that would have been applied to the producer, as long as they have been generated by the latter, the maximum amount of the deduction will be the result of multiplying by 1.20 the amount of the amounts contributed to finance production costs and advertising and promotion expenses borne by the producer.
The excess deduction may be applied by the producer who has generated the right to it.
Remember: In the case of the financier, he may apply the deduction provided for in section 1 of article 36 of the LIS when he contributes amounts intended to finance all or part of the production costs, as well as the expenses for obtaining copies, advertising and promotion borne by the producer up to a limit of 30% of production costs.
|Percentage of deduction
|Basis of deduction
€500,000 for each production carried out
In the case of the financier, with the above limits, the maximum amount will be the result of multiplying by 1.20 the amount of the amounts that have been contributed to finance the production costs, as well as the advertising and promotion expenses borne by the financier. producer.
(+) Direct artistic, technical and promotional costs incurred.
In the case of the financier, the production costs and expenses directly related to the advertising and promotion of the aforementioned actions are borne by the producer up to the limit of 30% of the production costs.
(-) Amount of subsidies received to finance expenses that generate the right to deduction
The necessary requirements to apply the deduction are:
The taxpayer must have a certificate to prove this, under the terms established by Ministerial Order, issued by the National Institute of Performing Arts and Music.
See in this regard Order ECD/2836/2015, of December 18, which regulates the procedure for obtaining the certificate of the National Institute of Performing Arts and Music, provided for in LIS .
That, of the profits obtained in the development of these activities in the year in which the right to deduction is generated, the taxpayer allocates at least 50 per 100 to the performance of activities that give the right to apply the deduction provided for in this section.
The profit obtained, subject to reinvestment, is understood to be those derived from income directly related to the production and exhibition of the live show (ticket sales, excluding sales of beverages, merchandising products, etc.).
The term for compliance with this obligation will be between the beginning of the year in which the aforementioned benefits were obtained and the 4 years following at the end of said year.
The amount of the deduction, together with the subsidies received by the taxpayer, may not exceed 80 per 100 of said expenses.
Tax period in which the deduction is applied
The deduction cannot be applied until you obtain the required certificate from the National Institute of Performing Arts and Music.
Once is obtained, the deduction will be applied for the expenses incurred in each tax period in the production and exhibition of live performing arts and musical shows.
Note: The application of the deduction by the taxpayer who participates in the financing will be incompatible, totally or partially, with the deduction to which the producer would be entitled.