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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 total cost of production, as well as the costs of obtaining copies and the costs of advertising and promotion to be borne by the producer up to the limit for both of 40 per cent of the cost of production.

At least 50 percent 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 giving rise to the right to deduct.

2.Percentage of deduction

The producer of the work and, where applicable, the taxpayers participating in the financing may apply the following deduction percentages:

  • 30 per cent of the first million of the deduction base.

  • 25 per cent on the excess of this amount.

3.Maximum amount of deduction

The amount of the deduction may not exceed EUR 10 million.

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.

A tener en cuenta:

In the case of a co-production , the amounts indicated in the previous paragraphs shall be determined, for each co-producer, according to their respective percentage of participation in the co-production.