Tax incentives for audiovisual production
in the Community of Madrid
Spain offers tax incentives for international films and television series which, together with the benefits of the territory and the audiovisual industry, make the country one of the most competitive destinations in the world for audiovisual production.
Spanish productions and international co-productions in Spain can access tax deductions on Corporate Tax. The regulations on tax incentives for filming in Spain are provided for in Article 36 of Law 27/2014, of 27 November on Corporate Tax , concerning the Deduction for investments in film productions, audiovisual series and live shows of performing arts and music.
The last modification of the law was carried out in final provision 5.2 of Law 38/2022, of December 27, in which Article 36 is modified, with effect for tax periods that begin from January 1, 2023.
Tax Incentives for international shootings
Spain offers tax incentives for international films and television series. The producers who are in charge of the execution in Spain of a foreign production of feature films or audiovisual works that allow the preparation of a physical support prior to their serial industrial production are entitled to tax deductions for the expenses incurred in Spanish territory. The current regulations are Law 27/2014, of November 27, on Corporation Tax, in particular, in its articles 36.2.
Amount of the deduction
30% with respect to the first million euros of the base of the deduction.
25% for the excess of this amount.
Maximum limit of the
deduction
20 million euros for each audiovisual production. In the case of audiovisual series, the deduction will be determined per episode and the limit will be 10 million euros per episode.
The amount of this deduction must not, in any case, exceed 50 % of the production cost.
Base of the deduction
Expenses made within Spanish territory, amounting to at least 1 million euros, and directly related to the production of the work:
- Expenses for creative personnel, provided that they have their tax residence in Spain or in a State
of the European Economic Area
- Expenses linked to the use of technical industries and other suppliers
Specialties for accessing
deduction
- Animation productions: the amount of minimum expenses incurred within Spanish territory will be of at least 200,000 euros.
- Visual effects services: If the producer is responsible for the execution of visual effects services and the expenses incurred within Spanish territory are less than 1 million euros, the deduction will amount to 30%.
The amount of this deduction may not exceed the amount established in the Community regulations on de minimis aids.
Requirements for
accessing deduction
- The production must have obtained the corresponding certificate accrediting cultural status.
- The final credits must include a specific reference to its having benefited from the tax incentive; the collaboration, if applicable, of the Government of Spain, the Autonomous Communities, the Film Commissions or the Film Offices.
- The holders of the rights must authorize the use of the title of the work and of graphic and audiovisual press material that expressly includes specific locations for the filming or for any other production process carried out in Spain.
Procedure
The Spanish production company in charge of the execution of international production will have to present the Corporate Tax declaration, applying the corresponding deduction.
Amount of the deduction
30 % with respect to the first million base of the deduction.
25 % of the excess of this amount.
Maximum limit of the deduction
The amount of this deduction must not exceed 20 million euros. In the case of audiovisual series, the deduction will be determined per episode and the limit will be 10 million euros per episode.
In the event of a co-production, the amounts will be determined, for each co-producer, based on their respective percentage of participation in the co-production.
The amount of this deduction, together with the rest of the aid received, must not exceed 50 percent of the production costs. However, this limit will be raised to:
85 % for shorts.
80 % for:
- Productions directed by a newcomer.
- Productions made entirely in one of the co-official languages.
- Productions directed exclusively by persons with a degree of disability of at least 33 %.
El 75 %:
- Productions made exclusively by women directors.
- Productions of special cultural and artistic value in need of exceptional financial support
- Documentaries.
- Animation works whose production budget does not exceed 2,500,000 euros.
60 % for:
- Cross-border productions financed by more than one EU Member State and involving producers
from more than one Member State.
- International co-productions with Ibero-American countries.
Base of the deduction
This will be composed of the total cost of the production, as well as the expenses for obtaining copies and the advertising and promotion expenses borne by the producer up to the limit for both of 40% of the production costs. At least 50% of the deduction base must correspond to expenses incurred in Spanish territory. The base of the deduction will be reduced by the amount of subsidies received to finance the investments that generate the right to deduction.
Requirements for
accessing deduction
- The production must have obtained the corresponding certificate of nationality and the
certificate accrediting cultural status.
- That a new copy of the production be delivered in a perfect state to the Spanish Cinemathèque or to
the corresponding cinemathèque of each Autonomous Community.
Procedure
The deduction will be generated in each tax period from the production cost therein incurred, although it will be applied starting from the tax period in which the production of the work ends.
Deduction for
participation in the
financing of works
Access to deduction will also be granted to those entities financing Spanish audiovisual works, when
amounts are contributed as financing, to defray all or part of the production costs without acquiring
intellectual property or other rights with respect to its results, it being necessary in all cases for the property to correspond to the production company. (article 39, Law 27/2014).
There are details in the regulations that are not presented here, so we recommend going to the literalness of articles 36.1 and 39, as well as the responses of the Tax Agency to the binding queries already made, included in the Frequently Asked Questions section on the website of
Spain Film Commission.
