Spain offers tax incentives for international films and TV series which, when you add it to the many benefits offered by this country and its audiovisual industry, make it one of the most competitive destinations in the area.
The laws which regulate these incentives can change every year, so it is worth informing yourself of any aspects which have changed during the year you are applying for your production. The current applicable legislation in common territory (all of Spain except for Navarre) is: Article 36.2 Law 27/2014 dated the 27th of November, on Corporation Tax. Rebates for investments in film and series audiovisual productions, live performances and musical shows.
In any case, these incentives are applicable to any Spanish producers registered on the Ministry of Education, Culture and Sport’s Film Company Register, who are managing a foreign production. This means that they are the ”service company” which takes on the executive production and which carries out the tax procedures involved in applying for a tax rebate.
The incentive currently in Andalusia is 20%
– Foreign production types: Feature length films, television series, animated films and documentaries.
– Maximum rebate limit: 3 million Euros.
– Beneficiaries: Spanish companies which are registered in the Film and Audio-visual Arts Institute’s register of audio-visual producers.
– Rebate base: eligible expenses incurred in Spain.
– Eligible expenses: creative staff with a registered address in the country or in another European Union member state, up to a maximum of €100,000 per person/technical or complementary service.
– Minimum expense incurred in Spain: 1 million Euros.
– Procedure: the refund must applied for by the Spanish company, during the month of July of the year after the end of filming.
The law includes further details which are not listed here, so we do recommend you read Article 36.2 in its entirety and the replies posted by the Inland Revenue Agency in response to binding queries.
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
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 25% of the first million Euros, and 20% if the investment is higher, with a maximum of 3 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).
Consultancy services and binding inquiries
At Andalucía Film Commission we recommend that production companies seek advice from an office or professional who specialises in taxation and if they also specialise in audiovisual productions then even better.
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 Inland Revenue offices by way of specific questions about how the tax incentives are applied. The Inland Revenue guarantees that the replies given are the only possible interpretation of the tax regulations concerned. These binding inquiries offer the taxpayer legal security as they cannot be contradicted.