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

a. Scope

The producer who makes investments in Spanish productions of feature films and short films and audiovisual fiction, animation or documentary series, which allow the preparation of a physical support prior to their serial industrial production, has the right to apply this deduction.

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

b. Requirements

1. That the production obtains the corresponding nationality certificate 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 cinematographic works 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 in perfect condition 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 investment permanence requirement established generally in article 39. 5 of the LIS , in the case of cinematographic productions and audiovisual series with effects for the tax periods that begin on or after January 1, 2021, it will be deemed fulfilled to the extent that the production company maintains the same percentage of ownership of the work for a period of 3 years, without prejudice to its power to fully or partially market the exploitation rights derived from it to one or more third parties.

c. Deduction base

The basis 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 cost of production.

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.

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 with respect to the first million base of the deduction.

• 25 percent on the excess of said amount.

e. Maximum deduction amount

For tax periods beginning on or after January 1, 2023, the maximum amount of the deduction will be 20 million euros (previously, the maximum amount was 10 million euros). 

In the case of audiovisual series , the deduction will be determined per episode and the maximum amount of deduction 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 production cost .

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 projected in Spain in said co-official language or with subtitles.

• 80 percent in the case of productions directed exclusively by people 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 need 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 animation 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 in which producers from more than one Member State participate.

• 60 percent in the case of international co-productions with Ibero-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 therein, although it will be applied from the tax period in which completes 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 nationality certificate is obtained ##2##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 exhibited in Spain, issued by the Institute of Cinematography and Audiovisual Arts, or by the corresponding body of the Autonomous Community.

The amounts not deducted in the tax period may be applied in the settlements of the tax periods that conclude within the 15 immediate and successive years .

h. Completion of model 200

Producers who have the right to practice 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 "General regime" section of table "Investments in cinematographic productions or audiovisual series" on page 21 of said model in the manner detailed below:

• Cinematographic productions (except audiovisual series)

  Producers must enter in this box the number of productions that have generated the right to practice the deduction for Spanish film productions in the tax period object of 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 practice this deduction in the tax period object of 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 met in each episode, to the extent that the limit of the deduction must be determined per episode, without the aforementioned limit being offset between episodes.