Deduction for investments in Spanish film productions (art. 36.1 LIS)

a. Scope

Producers who invest in Spanish feature-length and short films and audiovisual fiction, animation or documentary series that allow the creation of a physical medium prior to their serial industrial production are eligible to apply this deduction.

With effect for tax periods beginning on or after 1 January 2021, the taxpayer who participates in the financing of said productions is also entitled to apply this deduction.

b. Requirements

1. That the production obtains the corresponding certificate of nationality and the certificate that accredits the cultural character in relation to its content , its connection with the Spanish cultural reality or its contribution to the enrichment of the cultural diversity of the cinematographic works that are exhibited in Spain, issued by the Institute of Cinematography and Audiovisual Arts , or by the corresponding body of the Autonomous Community with competence in the matter.

2. That a new and perfect copy of the production be delivered to the Spanish Film Library or the film library officially recognized by the respective Autonomous Community.

3. Regarding the requirement of permanence of investments established in general terms in article 39. 5 of the LIS , in the case of cinematographic productions and audiovisual series with effect for tax periods beginning on or after January 1, 2021, will be deemed to have been fulfilled to the extent that the producer maintains the same percentage of ownership of the work for the period of 3 years, without prejudice to its right to fully or partially market the exploitation rights derived from it to one or more third parties.

c. 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.

d. 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.

e. Maximum deduction amount

For tax periods beginning on or after 1 January 2023, the maximum deduction amount will be million (previously, the maximum amount was €10 million). 

In the case of audiovisual series , the deduction will be determined per episode and the maximum deduction amount will be 10 million euros for each episode produced.

In the case of a co-production , the amounts indicated in this section will be determined, for each co-producer, based on their respective percentage of participation in it.

f. Limits

The amount of this deduction, together with the rest of the aid received, may not exceed 50 percent of the cost of production .

However, this limit will be raised to:

• 85 percent for short films.

• 80 percent for productions directed by a person who has not directed or co-directed more than two feature films qualified for commercial exploitation in cinema exhibition halls, whose production budget does not exceed 1,500,000 euros.

• 80 percent in the case of productions shot entirely in one of the co-official languages other than Spanish that are screened in Spain in said co-official language or with subtitles.

• 80 percent in the case of productions directed exclusively by persons with a degree of disability equal to or greater than 33 percent recognized by the competent body.

• 75 percent in the case of productions made exclusively by female directors.

• 75 percent in the case of productions with special cultural and artistic value that require exceptional financing support according to the criteria established by Ministerial Order or in the corresponding calls for aid.

• 75 percent in the case of documentaries.

• 75 percent in the case of animated works whose production budget does not exceed 2,500,000 euros.

• 60 percent in the case of cross-border productions financed by more than one Member State of the European Union and involving producers from more than one Member State.

• 60 percent in the case of international co-productions with Latin American countries.

g. Tax period in which the deduction is applied

This deduction will be generated in each tax period for the production cost incurred in the same, although it will be applied from the tax period in which finishes the production of the work .

However, in the case of animation productions , the deduction provided for in this section will be applied from the tax period in which the certificate of nationality and the certificate attesting to the cultural nature in relation to its content, its connection with Spanish cultural reality or its contribution to the enrichment of the cultural diversity of cinematographic works exhibited in Spain, issued by the Institute of Cinematography and Audiovisual Arts, or by the corresponding body of the Autonomous Community, are obtained.

Amounts not deducted in the tax period may applied in the settlements of tax periods ending within the 15 immediate and successive years.

h. Completion of form 200

Producers who are entitled to apply the deduction for Spanish film productions regulated in article 36.1 of the LIS, in addition to the table "Deductions to encourage certain activities (Cap. IV Tit. VI, DT 24.3 LIS and art. 27.3 first Law 49/2002)» on pages 17, 18 and 18 bis of model 200, must complete the section «General regime» of table «Investments in cinematographic productions or audiovisual series» on page 21 of said model in the manner detailed below:

• Film productions (except audiovisual series)

  Producers must enter in this box the number of productions that have generated the right to apply the deduction for Spanish film productions in the tax period covered by the declaration.

• Audiovisual series

  In the case of audiovisual series, the deduction is determined per episode, so producers must enter in the boxes created for this purpose the number of series and episodes that generate the right to apply this deduction in the tax period covered by the declaration.

  When completing box "number of episodes" it must be taken into account that the maximum deduction limit per episode provided for in article 36.1 of the LIS must be examined and complied with in each episode, to the extent that the deduction limit must be determined by episode, without the aforementioned limit being able to be offset between episodes.