Regulatory developments 2017Skip information index
Act 3/2017 of 27 June on the General State Budgets for 2017 (Official State Gazette 28 June)
MAIN NEW FEATURES INTRODUCED BY LAW 3/2017, of 27 June, ON THE GENERAL STATE BUDGETS FOR 2017 (BOE of 28 June)
Improvement of the deduction for investments in film productions, audiovisual series and live performing arts and music events.
For the tax periods starting from 1 January 2017, the 125th Additional Provision of Act 3/2017 of the National General Budget for the year 2017 (LPGE 2017) modifies article 36, sections 1 and 2 of the Spanish Corporation Tax Act 27/2014.This article regulates the deduction for investments in film productions, audiovisual series and live performing arts and music events, which entered into force for tax periods starting from 1 January 2015.
The 125th Additional Provision of the LPGE introduces the following changes:
The percentages of deductions regulated by article 36.1 of the Spanish Corporation Tax Act, applicable to investment in full-length Spanish film productions and fiction, animation or documentary audiovisual series which involve the creation of a physical support before they are mass-produced industrially will be set at:
25% on the first million of the basis for assessment (20% in 2015 and 2016).
20% on the excess of the above-mentioned amount (18% in 2015 and 2016).
It is added that, in addition to the Instituto de Cinematografía y de las Artes Audiovisuales (Spanish Film and Audiovisuals Institute), the certificate required in article 36.1.a) of the Spanish Corporation Tax Act as a requirement for the deduction, can also be issued by the corresponding authorised body of the Autonomous Community.
The limit regulated by article 36.1 of the Spanish Corporation Tax Act is also increased, so that for the periods starting in 2015 and 2016, the total deduction, together with other allowances received by the taxpayer, cannot exceed 50% of the cost of production.With effects for the tax periods started from 1 January 2017, it has been added that this limit will be increased to:
60% in the case of cross-border productions financed by more than one European Union member state and in which producers from more than one Member state participate.
70% in the case of the productions directed by one new filmmaker with a production budget of under 1 million euros.
There is also an increase in the deduction percentage regulated in article 36.2 of the Spanish Corporation Tax Act, applicable to producers registered with the Registry of Filmmakers of the Ministry of Education, Culture and Sport who are undertaking a full-length foreign motion picture or audiovisual production resulting in the creation of a physical support before they are mass-produced industrially.
The percentage is set at 20% of the expenses incurred in Spain, provided that they are at least 1 million euros (15% in 2015 and 2016).
There is also an increase in the basis of assessment regulated by article 36.2 of the Spanish Corporation Tax Act, which will include the following expenses made in Spanish territory directly relating to the production:
Expenses on creative staff, provided they are tax-registered in Spain or another member State of the European Economic Area, with the limit of 100,000 euros per person (50,000 euros per person in 2015 and 2016).
Expenses deriving from the use of technical industries and other suppliers.
The deduction limit regulated by article 36.2 of the Spanish Corporation Tax Act is extended, so that it cannot exceed 3 million euros for each production made (2.5 million euros in 2015 and 2016).
de Presupuestos Generales del Estado para el año 2017.