Base, percentages and maximum amount of the deduction

1. Deduction base

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

At least 50 percent of the deduction base must correspond to expenses made in Spanish territory .

The base of the deduction 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 with respect to the first million base of the deduction.

• 25 percent on the excess of said amount.

3. Maximum deduction amount

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

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 percent of the full 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 corresponds to expenses and investments made in the tax period itself , exceeds 10 percent of the full quota, reduced by deductions to avoid international double taxation and bonuses.

In cases in which the taxpayer who participates in the financing of Spanish productions of feature films, cinematographic short films, fiction, animation or documentary audiovisual series made by other taxpayers apply the deduction, the maximum amount of the deduction generated by the producer that the producer can apply will be the result of multiply by 1.20 the amount of the amounts that the latter has contributed to finance the production costs or the expenses for obtaining copies, advertising and promotion at the expense of the producer. The excess deduction may be applied by the producer who has generated the right to it.

The amount of the deduction applied by the taxpayer who participates in the financing of said productions must be taken into account for the purposes of applying the joint limit of 25 percent established in article 39.1 of the LIS. However, said limit will be raised to 50 percent when the amount of the deduction provided for in sections 1 and 3 of article 36 of the LIS, which corresponds to the taxpayer participating in the financing , is equal to or greater than 25 percent of its full quota reduced by deductions to avoid international double taxation and bonuses.