Deduction for investments in film productions, audiovisual series and live performances of performing arts and music

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 feature-length film productions and fiction, animation or documentary audiovisual series. The amount of this deduction, together with any other aid received by the taxpayer, may not 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 January 1, 2021, co-productions in which only British producers participate 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.

From 1 January 2021, authors, actors or technical creative staff with British nationality or residence will not be counted 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 a foreign production in Spain have the right to a deduction of 30 percent on the first million of the deduction base and 25 percent on the excess of said amount of expenses incurred in Spanish territory, within certain limits. These expenses correspond, among others, to those of creative personnel, provided that they have tax residence in Spain or in an EEA Member State, with a limit.

Thus, as of January 1, 2021, creative staff with tax residence in the United Kingdom will not be entitled to the deduction examined for expenses incurred by the Spanish production entity.