Deductions to encourage certain activities

Investments in Spanish productions of feature films and short films and audiovisual series of fiction, animation or documentaries, which allow the creation of a physical support prior to their serial industrial production, will entitle the producer to a deduction:

1. 30 percent of the first million of the deduction base.

2. 25 percent of the excess amount.

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 a limit of 40 percent of the cost of production for both.

At least 50 percent of the deduction base must correspond to expenses incurred in Spanish territory.

The amount of this deduction may not exceed 10 million euros. For tax periods beginning on or after 1 January 2023, the amount of this deduction may not exceed 20 million euros. In the case of audiovisual series, the deduction will be determined per episode and the limit referred to in the previous paragraph 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 the production.

The production costs incurred in each tax period will qualify for this deduction, although it will be applied with effect from the tax period in which production of the work is concluded. Nonetheless, in the case of animations, the deduction will be applied with effect from the tax period in which the certificate of Spanish nationality is obtained.

The basis for assessment will be reduced by the amount of any grants received to finance investments entitling the producer to this deduction.

The application of this deduction is extended to taxpayers who participate in the financing of such productions.

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:

1. 85 percent for short films.

2. 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 theaters, whose production budget does not exceed 1,500,000 euros.

3. 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.

4. 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.

5. 75 percent in the case of productions made exclusively by female directors.

6. 75 percent in the case of productions with special cultural and artistic value that require exceptional financial support according to the criteria established by Ministerial Order or in the corresponding calls for aid.

7. 75 percent in the case of documentaries.

8. 75 percent in the case of animated works with a production budget of no more than 2,500,000 euros.

9. 60% 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.

10. 60 percent in the case of international co-productions with Latin American countries.

The following requirements must be met for the application of this deduction:

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. The certificates required for its application are binding for the AEAT regardless of their date of issue.

2. A new copy of the production in mint condition must be lodged with the Spanish Film Archive or the film archive officially recognised by the respective Autonomous Community, as specified in Order CUL/2834/2009.

Producers registered in the Administrative Registry of Film Companies of the Institute of Cinematography and Audiovisual Arts who are in charge of the execution of a foreign production of feature films or audiovisual works that allow the creation of a physical support prior to their serial industrial production will be entitled to a deduction for expenses incurred in Spanish territory:

a) 30 percent of the first million of the deduction base.

b) 25 percent of the excess of said amount.

The deduction will be applied provided that such expenses are at least 1 million euros. However, for pre-production and post-production expenses for animation and visual effects carried out in Spain, the limit is set at 200,000 euros.

The basis of assessment will include the following expenses made in Spanish territory directly relating to the production:

1. Expenses for creative staff, provided that they have tax residence in Spain or in a member state of the European Economic Area, with a limit of 100,000 euros per person. With effect for tax periods beginning on or after 1 January 2023, the limit of €100,000 per person for creative staff expenses is eliminated.

2. Expenses deriving from the use of technical industries and other suppliers.

The amount of this deduction may not exceed 10 million euros for each production carried out. With effect for tax periods beginning on or after 1 January 2023, the amount of this deduction may not exceed 20 million euros for each production carried out. In the case of audiovisual series, the deduction will be determined per episode and the limit referred to in the previous paragraph will be 10 million euros for each episode produced.

The deduction provided for in this section is excluded from the limit referred to in the last paragraph of section 1 of article 39 of this Law. This deduction will not be taken into account for the purpose of the calculation of the aforementioned limit.

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

The costs incurred for producing and exhibiting live shows in the performing arts and music will be subject to a 20% reduction.

The base of the deduction will consist in the direct costs of an artistic, technical and promotional nature, incurred in such activities.

The deduction generated in each tax period cannot exceed the amount of 500,000 euros per taxpayer.

The base of this deduction will be reduced by the amount of the subsidies received to fund such expenses.

Together with the subsidies received by the taxpayer, the amount of this deduction cannot exceed 80% of said expenses.

The application of this deduction is extended to taxpayers who participate in the financing of such productions.

The following requirements must be met for the application of this deduction:

1. The taxpayer must have a certificate to prove this, under the terms established by Ministerial Order, issued by the National Institute of Performing Arts and Music.

2. The taxpayer must use at least 50% of the profits acquired, in the fiscal year in which the right to the deduction is generated, to carry out activities that give rise to this deduction. The time period for meeting this obligation is from the start of the fiscal year in which the aforementioned profits are acquired, and 4 years following the close of the same fiscal year.