Deduction applicable to taxpayers who participate in the financing of Spanish film productions and live shows (article 39,7 of the Spanish Corporation Tax Act)

With effect for the tax periods beginning from 1 January 2021, the taxpayer participating in the financing of Spanish productions of film and short films and audiovisual series of fiction, animation, documentary or production and exhibition of live performing arts and music shows by another taxpayer, may apply the deductions provided for in sections 1 and 3 of article 36 of the LIS , provided that it provides amounts for financing, to cover all or part of the production costs without acquiring intellectual or other property rights with regard to the results of the same, the ownership of which must be owned by the producer in any case. Contributions may be made at any stage of production until the national certificate is obtained.

1. Specific features of the deduction

A) Requirements

1. Subscription of a financing contract

   Both the producer and the taxpayer who participate in the production financing must sign a financing agreement in which the following aspects are required, among others:

   • Identity of the taxpayers participating in the production.

   • Description of production.

   • Production budget with a detailed description of the expenses and, in particular, those to be carried out in Spanish territory.

   • Form of financing of production, specifying the quantities provided by the producer, those provided by the taxpayer participating in their financing and those corresponding to grants and other support measures.

   • Other matters that are established by regulations.

2. Notification to the Tax Administration

   In addition, the financing and certification contract for compliance with requirements a ") and b") of section 1 must be presented; or of requirement a ") of section 3 of article 36 of the Spanish Corporation Tax Act, as applicable, in a communication to the Tax Administration, subscribed by both the producer and the taxpayer who participates in the financing of production, before the end of the tax period in which the deduction is generated, under the terms that are established by regulations.

B) Reintegrating the amounts contributed

This will be done by liquid deductions in instalments, which, in accordance with the contract and the provisions of sections 1 and 3 of article 36 of the LIS, the producer transfers to the taxpayer that participates in the financing.

C) Amount of the deduction

The taxpayer who participates in the financing will have the right to prove the deduction in their self-assessment, determining the amount in the same conditions as the producer. However, the taxpayer who participates in the financing of production will not be able to apply a deduction higher than the corresponding amount, in terms of the payment, resulting from multiplying the amount of the amounts paid for it by 1.20. The excess may be applied by the producer.

The accreditation of the deduction by the taxpayer participating in the financing will be incompatible, in whole or in part, with the deduction to which the producer would be entitled, as set out in sections 1 and 3 of article 36 of the LIS.

2. Filling in form 200

The taxpayer who participates in the financing of production and wishes to prove their right to apply the deduction of sections 1 and 3 of the article 36 of the LIS, you must first mark the box [00074] "Taxpayer that finances cinematographic productions and others with the right to deduction of article 36,1 and 3 of the Spanish Corporation Tax Act "on page 1 of form 200.

In addition to marking box [00074], the taxpayer who participates in the financing of production, in order to apply the deduction provided for in sections 1 and 3 of article 36 of the LIS must be included in the section "Further information on Spanish film productions and shows live "on page 17 of form 200, the Tax ID of the taxpayer who makes the production or show they finance.