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Practical Handbook for Companies 2021

Deduction applicable to taxpayers participating in the financing of Spanish film productions and live shows (art. 39.7 LIS)

With effect for tax periods beginning on or after 1 January 2021, the taxpayer who participates in the financing of Spanish productions of feature films and short films and audiovisual series of fiction, animation, documentary or production and exhibition of live shows of performing arts and music made by another taxpayer, may apply the deductions provided for in paragraphs 1 and 3 of Article 36 of the LIS, provided that they contribute amounts by way of financing, to cover all or part of the costs of the production without acquiring intellectual property rights or other rights in the results thereof, whose ownership must in any case be that of the production company.Contributions may be made at any stage of production until the certificate of nationality is obtained.

1.Particularities of the deduction

a) Requirements

  1. Entering into a financing contract

    Both the producer and the contributor participating in the financing of the production must sign a financing contract specifying, inter alia, the following points:

    • Identity of the contributors involved in the production.

    • Description of production.

    • Budget of the production with a detailed description of the expenses and, in particular, those to be incurred on Spanish territory.

    • How the production is financed, specifying separately the amounts contributed by the producer, the amounts contributed by the contributor participating in the financing of the production and the amounts corresponding to subsidies and other support measures.

    • Other matters established by regulation.

  2. Notification to the tax authorities

    In addition, the financing contract and certification of compliance with requirements a') and b') of section 1 or requirement a') of section 3 of Article 36 of the LIS, as applicable, must be submitted in a communication to the tax authorities, signed by both the producer and the taxpayer participating in the financing of the production, prior to the end of the tax period in which the deduction is generated, under the terms established in the regulations.

(b) Repayment of contributions

This will be done by means of deductions in quota, which, in accordance with the contract and the provisions of Article 36(1) and (3) of the LIS, the producer transfers to the taxpayer participating in the financing.

(c) Amount of the deduction

The taxpayer participating in the financing shall be entitled to credit the deduction in his self-assessment, the amount of the deduction being determined under the same conditions as would have applied to the producer.However, the taxpayer who participates in the financing of the production may not apply a deduction greater than the amount corresponding, in terms of quota, to resulting from multiplying by 1.20 the amount of the sums paid by him for the financing of that production.The excess may be applied by the producer.

The crediting 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 under Article 36(1) and (3) of the LIS.

2.Filling in form 200

The taxpayer who participates in the financing of the production and wishes to accredit his right to apply the deduction of sections 1 and 3 of article 36 of the LIS, must first tick the box [00074] "Taxpayer who finances film productions and others entitled to the deduction of art. 36.1 and 3 LIS" on page 1 of form 200.

Remember:

When all or part of the production costs have been financed by another taxpayer, the producer must tick in the tax period in which he applies the deduction provided for in sections 1 and 3 of article 36 of the LIS, the box [00044] "Taxpayer applying deductions of art. 36.1 and 3 LIS with financing by another taxpayer" on page 1 of form 200.

In addition to ticking box [00074], the taxpayer participating in the financing of the production, in order to be able to apply the deduction provided for in sections 1 and 3 of article 36 of the LIS, must enter in section "Additional information on Spanish film productions and live shows" on page 17 of form 200, the NIF of the taxpayer who is making the production or show they are financing.