Incentives

Spanish productions and international co-productions in Spain are eligible for corporate income tax deductions. Investments in Spanish productions of feature films and short films and audiovisual series of fiction, animation or documentary, which allow the preparation of a physical support prior to its serialized industrial production, entitle the producer or the taxpayers participating in the financing to a deduction:

a) Of 30 percent with respect to the first million of the base of the deduction. 
b) 25 per cent on the excess of the said amount.

• The deduction base is equal to the total cost of production plus the cost of copies, advertising and promotion to be borne by the producer (with a limit of 40% of the production costs).
• The law establishes a territorial requirement: 50% of the deduction base must correspond to expenses incurred in Spanish territory.
• Deduction limit: 20 million euros per production.In the case of a co-production, the amounts will be determined, for each co-producer, by episode and the limit will be 10 million euros per episode. 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 case of a co-production, the amounts will be determined, for each co-producer, according to their respective percentage of participation in the co-production..

For the application of the deduction, the following requirements must be met:

a) That the production obtains the corresponding certificate of nationality and the certificate accrediting the cultural nature in relation to its content, its link with the Spanish cultural reality or its contribution to the enrichment of the cultural diversity of the cinematographic works shown in Spain, issued by the Institute of Cinematography and Audiovisual Arts, or by the corresponding body of the Autonomous Community with competence in the matter. Said certificates will be binding for the competent Tax Administration in matters of accreditation and application of the above tax incentives and identification of the beneficiary producer, regardless of the time of issuance thereof. 
b) That a new copy of the production is delivered in perfect condition to the Filmoteca Española or the film library officially recognized by the respective Autonomous Community..

• The deduction will be generated in each tax period for the production cost incurred in the same, although it will be applied from the tax period in which the production of the work is completed. In the case of animation productions, the deduction foreseen in this section will be applied from the tax period in which the certificate of nationality is obtained.
• The basis of the deduction will be reduced by the amount of the subsidies received to finance the investments that generate the right to the deduction.
• The amount of this deduction, together with the rest of the aid received, may not exceed 50 percent of the production cost. However, this limit is higher in certain cases: short films, new directors, co-official languages other than Spanish, works directed by people with disabilities, works directed by women, works of special cultural and artistic value, documentaries, animated works with a budget of less than 2.5 million euros, cross-border productions and international co-productions with Latin American countries..

Spain offers tax incentives for international films and television series.

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 its industrial serial production are entitled to tax deductions for expenses incurred in Spanish territory.

The regulations in force are Law 27/2014, of November 27 , on Corporate Income Tax, in particular, we its articles 36.2 and 39, as well as article 45 of Royal Decree 634/2015, of July 10 , approving the Corporate Income Tax Regulations.

These incentives are applicable to Spanish producers registered in the Registry of Film Companies of the Spanish Institute of Cinematography and Audiovisual Arts who are in charge of the execution of a foreign production. This means that it is the Spanish company that undertakes the production that has to carry out all the procedures to qualify for the tax deduction.

• The amount of the deduction will be 30% for the first million euros and 25% for the rest of the expenses incurred in Spain.
• In the case of audiovisual series, the deduction will be determined per episode and the limit will be 10 million euros per episode.

The basis for the deduction are the following expenses incurred in Spanish territory directly related to the production (eligible expenses):

• Expenses of creative personnel, provided that they have tax residence in Spain or in any Member State of the European Economic Area.
• Expenses derived from the use of technical industries and other suppliers.

The amount of this deduction, together with the rest of the aid received, may not exceed 50 percent of the production cost. The deduction will be applied provided that the expenses incurred in Spanish territory are at least 1 million euros. There are the following exceptions:

1. Animation: the amount of expenses incurred in Spanish territory shall be at least €200,000.
2. Visual effects services: when the producer is in charge of the execution of visual effects services and the expenses incurred in Spanish territory are less than €1 million, he may obtain a deduction of 30% . The amount of this deduction may not exceed the amount established by Commission Regulation (EU) 1407/2013 of December 18, 2013, on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid.

According to Article 45 of Royal Decree 634/2015, of July 10 , approving the Corporate Income Tax Regulations, productions that generate the right to the referred deduction must have a minimum cost of 2 million euros and the basis for the deduction may not exceed 80 percent of the total cost of the production.

Procedure: The Spanish production company in charge of the international production must present the liquidation of all eligible expenses in the month of July of the fiscal year following the date of the filming and request the reimbursement.