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 which is officially recognised in an Autonomous Community.
GENERAL TAX REGIMEN (Except for the Canary Islands, Navarre and the Basque Country)
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