Deduction for investments in film productions and audiovisual series

Regulations: Art. 36.1 LIS

Deduction beneficiaries

Regulations: see art. 39.7 LIS

1. Producers: taxpayers who make Spanish productions of feature films and short films and audiovisual fiction, animation or documentary series.

2. Financiers: Since January 1, 2021, they are allowed to apply this deduction, under the same conditions as the producers who generate the right to it, businessmen or professionals, who participate in the financing of Spanish productions of feature films, short films, series audiovisual fiction, animation or documentary, when the following circumstances occur:

   • That they contribute amounts as financing, to cover all or part of the production costs as well as the expenses for obtaining copies, advertising and promotion by the producer up to the limit of 30% of the production costs.

   • That they do not acquire intellectual or other property rights regarding the results of production , whose property must in all cases belong to the producer.

   • That are not linked , within the meaning of article 18 of the LIS , with the taxpayer who generates the right to deduction (the producer).

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% of the production cost .

At least 50% of the deduction base must correspond to expenses incurred in Spanish territory .

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 prior physical support to its serial industrial production will entitle the producer or the taxpayers who participate in the financing (financier), 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.

Regarding the definition of Spanish productions of feature films and short films and audiovisual series of fiction, animation or documentaries, see article 4 of Law 55/2007, of December 28, on Cinema ( BOE December 29).

b. Maximum deduction amount

• For the producer: 

  • In general, the amount of this deduction may not be greater than 20 million euros .

  • In the case of audiovisual series, the deduction will be determined per episode and the limit referred to in the previous paragraph will be 10 million euros for each episode produced.

  In the case of a co-production, the amounts just indicated will be determined, for each co-producer , based on their respective percentage of participation in that one. 

• 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 same will be the result of multiplying the amount by 1.20 of the amounts that has contributed to finance the aforementioned production costs and the expenses for obtaining copies, advertising and promotion at the expense of the product.

  The excess deduction may be applied by the producer who has generated the right to it.

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.

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% of the production cost . However, this limit is raised to 80% in the case of productions directed exclusively by people with a degree of disability equal to or greater than 33% recognized by the competent body.

To apply this deduction, it is necessary to comply with the established requirements.