Deduction for investments in film productions and audiovisual series

Regulations: Art. 36.1 LIS

Beneficiaries of the deduction

Regulations: see art. 39.7 LIS

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

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

   • That they provide amounts in the form of financing, to cover all or part of the production costs as well as the costs of obtaining copies, advertising and promotion at the expense of the producer up to the limit of 30% of the production costs.

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

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

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 the 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 .

The deduction base will be reduced by the amount of the 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 documentary , which allow the creation of a physical support prior to their serial industrial production will entitle the producer or taxpayers who participate in the financing (financier) to a deduction that will be:

• From 30 percent with respect to the first million of the deduction base.

• From 25 percent on the excess of said amount.

As for the definition of Spanish productions of feature films and short films and audiovisual series of fiction, animation or documentary, 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 exceed 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 indicated above will be determined, for each co-producer , based on their respective percentage of participation in that production. 

• For the funder: although the amount of the deduction may be determined under the same conditions as those applied to the producer, provided that they have been generated by the latter, the maximum amount of the same will be the result of multiplying by 1.20 the amount of the sums that have 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, the following requirements must be met:

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 competence in the matter.

2. 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.

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

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