Incentives National productions and Coproductions

Spanish productions and international co-productions can gain access to tax credit on Corporation Tax once they have obtained their Spanish nationality and cultural certificates issued by the ICAA, and once a copy of the production has been deposited at the Spanish Film Archive or in a film library officially recognised in an Autonomous Community.

General Tax Regimen 

Current legislation: Article 36.1. Law 27/2014 dated the 27th of November, on Corporation Tax. Tax Credit for investment in film and series audiovisual productions, live performances and musical shows. The laws which regulate these incentives can change every year, so it is worth finding out what, if any, aspects have changed, during the year you are making the investment. Summary of the article:

  • Spanish investments in film and audiovisual production are often carried out via an EIG (Economic Interest Grouping) which is set up as the film’s producer. These investments give the producer the right to a tax credit of 30% of the first million Euros, and 25% if the investment is higher, with a maximum of 10 million Euros per production.
  • The base for the deduction is equal to the total production cost plus the cost of copies, advertising and promotion financed by the producer (with a limit of 40% of the production cost).
  • The law establishes a territorial requirement and 50% of the deduction base must correspond to the expenses incurred in Spain.
  • It also specifies that the total tax incentive amount received must not exceed 50% of the production cost.
  • In the case of a co-production, the amounts will be determined for each co-producer, according to their respective share-percentage of the co-production.
  • Once the film’s nationality certificate has been obtained and the rest of the requirements have been fulfilled, the tax rebate can be applied for during the month of July in the year after the production end-date.

The law includes further details which are not listed here, so we do recommend you read Article 36.1 in its entirety as well as the replies posted by the Inland Revenue Agency in response to the binding queries (some of these are featured in our Frequently Asked Questions section).

International Coproductions

International co-productions governed by international agreements and those considered national are treated as national productions, and this means that they can benefit from tax rebates for investment in film and audiovisual productions, as well as being able to apply for funding from the ICAA for creation, production and promotion.

You can find more information in the following link co-production-agreements

Consultancy services and binding inquiries

AFC recommends the production companies to seek advice from an office specialized on taxation and/or specialized audiovisual productions.

Binding inquiries are documents through which any taxpayer can contact the public administration to enquire about the interpretation and application of regulations. Any production can request information from the Spanish Tax Agency’s offices by way of questions about the application of the tax incentives. The Tax Agency guarantees the given response as the tax regulation’s only possible interpretation. These binding inquires offer the taxpayer legal security because nobody can contradict what they say.

 
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