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 costs of obtaining copies and the advertising and promotion costs 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 .

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.

In cases where the taxpayer who participates in the financing of Spanish productions of feature films, short films, audiovisual series of fiction, animation or documentaries made by other taxpayers applies the deduction, the maximum amount of the deduction generated by the producer that the former may apply will be the result of multiplying by 1.20 the amount of the sums that the latter has contributed to finance the production costs or the expenses for obtaining copies, advertising and promotion at the producer's expense. 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 joint limit 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 who participates in the financing, is equal to or greater than 25 percent of its full share reduced by deductions to avoid international double taxation and bonuses.