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Practical Handbook for Companies 2021

Basis, percentages and maximum amount of deduction

1.Deduction base

The basis for the deduction shall be the direct artistic, technical and promotional costs incurred in these activities.

The base of this deduction will be reduced by the amount of the subsidies received to finance the expenses giving rise to the right to the deduction.

2.Applicable rates

The percentage of deduction applicable will be 20 per cent on the expenses incurred in the tax period in the production and exhibition of live performing arts and musical shows.

3.Maximum amount of deduction

The deduction generated in each tax period may not exceed the amount of 500,000 euros per taxpayer.

The amount of the deduction, together with the subsidies received by the taxpayer to finance the expenses giving rise to the right to the deduction, may not exceed 80 percent of those expenses.

In cases where the taxpayer who participates in the financing of productions carried out by another taxpayer applies the deduction, the deduction may not exceed the corresponding amount, in terms of quota, resulting from multiplying by 1.20 the amount of the sums paid by him for the financing of the said production.The excess of this amount may be applied by the producer.

The amount of this deduction together with the other deductions provided for in Chapter IV of Title VI of the LIS, applied in the tax period, together may not exceed 25 per cent of the gross tax liability less deductions for the avoidance of double international taxation and allowances.However, the limit will be raised to 50 per cent when the amount of the deductions provided for in articles 35 and 36 of the LIS, corresponding to expenses and investments made in the tax period itself, exceeds 10 per cent of the gross tax liability, less deductions for the avoidance of double international taxation and allowances.