Base, percentages and maximum amount of the deduction

1. Deduction base

The basis for the deduction will be the total cost of production, as well as the expenses for obtaining copies and the expenses for advertising and promotion borne by the producer up to the limit for both of 40 percent 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 that generate the right to deduction.

2. Percentage of deduction

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

• 30 percent of the first million of the deduction base.

• 25 percent on the excess of said amount.

3. Maximum deduction amount

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

In cases where the taxpayer who participates in the financing of productions made by another taxpayer applies the deduction, it may not be greater than the corresponding amount, in terms of quota, resulting from multiplying by 1.20 the amount of the amounts disbursed by him for the financing of said production. Any excess over this amount may be applied by the producer.

The amount of this deduction together with the rest of those provided for in Chapter IV of Title VI of the LIS , applied in the tax period, may not jointly exceed 25 percent of the total quota reduced by deductions to avoid international double taxation and bonuses. However, the limit will be raised to 50 percent when the amount of the deductions provided for in articles 35 and 36 of the LIS, which correspond to expenses and investments made in the tax period itself, exceeds 10 percent of the total quota, reduced by the deductions to avoid international double taxation and the bonuses.