Deduction for investments in film productions, audiovisual series and live performing arts and musical shows
Article 36 of the LIS regulates a deduction for investments in film productions, audiovisual series and live shows. Section 1 sets out limits on the deduction percentages for investments in Spanish productions of feature films and audiovisual fiction, animation or documentary series. The amount of this deduction, together with the rest of the aid received by the taxpayer, cannot exceed 50 percent of the production cost, except for certain exceptions . However, it is established that this limit will be raised to 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, therefore, from the January 1, 2021, co-productions involving only British production companies will not benefit from the increased limit.
Likewise, and in this sense, article 5 of Law 55/2007, of December 28, on Cinema ( BOE of December 29), includes the requirements to understand that a production is Spanish, which requires that the cast of authors, actors or creative technical personnel of the cinematographic and audiovisual works be made up, at least 75 percent, of people with Spanish nationality or from any of the other Member States of the EU, the EEA , or who have a valid residence card or authorization in Spain or in any of said States.
As of January 1, 2021, authors, actors or creative technical personnel with British nationality or residence will not count towards the application of the percentage seen.
Section 2 of article 36 of the LIS establishes that producers who are responsible for the execution of foreign production in Spain are entitled to a deduction of 30 percent with respect to the first million base of the deduction and 25 percent on the excess of said amount of expenses incurred in Spanish territory with certain limits. These expenses correspond, among others, to those of creative personnel, as long as they have tax residence in Spain or in a Member State of the EEA, with a limit.
Thus, as of January 1, 2021, creative personnel with tax residence in the United Kingdom will not be entitled to the deduction examined for the expenses incurred by the Spanish production entity.