News published in INFORMA 2021

New features introduced in the INFORMA programme during OCTOBER

The reduction of the tax base corresponding to the allocation of the capitalization reserve, when there are amounts pending to be applied from previous periods together with those generated in the period itself, the taxpayer may apply them in the order he wants, since there is nothing established about whether one or the other has to be applied first.

A provision intended to cover the risk arising from a possible future compensation in the event of dismissal of workers is not tax deductible.

For tax periods beginning during 2020, investments in Spanish productions of feature films and short films and audiovisual series of fiction, animation or documentary, made in the Canary Islands, which allow the creation of a physical support prior to their serial industrial production, will entitle the producer to a deduction of 54% with respect to the first million of the deduction base and 45% on the excess of said amount. The amount of this deduction may not exceed 12.4 million euros for each production carried out in the Canary Islands. For tax periods starting in 2021, this amount rises to 18 million.

For tax periods beginning in 2020, 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, made in the Canary Islands, which allow the creation of a physical medium prior to their serial industrial production, will be entitled for expenses incurred in the Canary Islands to a deduction of 54% with respect to the first million of the deduction base and 45% on the excess of said amount. The amount of this deduction may not exceed 12.4 million euros for each production carried out in the Canary Islands. For tax periods beginning in 2021, this amount rises to 18 million.

With effect from January 1, 2021, Law 14/2021, of October 11, modifies article 2 of Law 49/2002, of December 23, regarding which entities are considered non-profit.

With effect for tax periods beginning on or after 1 January 2021, the amount of the deduction for expenses incurred in the production and exhibition of live performing arts and musical shows, referred to in section 3 of article 36 of Law 27/2014, on Corporate Income Tax, may not exceed the result of increasing by 80 percent the maximum amount referred to in said article when the expenses are incurred in the Canary Islands.

The expenses arising from implementing various risk prevention measures, which entail assuming a series of labor, infrastructure and material acquisition costs may not form part of the basis for the deduction provided for in article 36.2 of the LIS to the extent that said provision requires that the expenses be directly related to production.