B. Deduction for foreign film productions in Spain (art. 36.2 LIS)
Producers registered in the Administrative Registry of Cinematographic Companies of the Institute of Cinematography and Audiovisual Arts who are in charge of the execution of a foreign production of feature films or audiovisual works that allow the creation of a physical support prior to their serial industrial production, will have the right to a deduction for expenses incurred in Spanish territory.
Deduction base
The basis for the deduction is made up of the following expenses incurred in Spanish territory directly related to production:
- Expenses for creative staff, provided that they have tax residence in Spain or in a member state of the European Economic Area, with a limit of 100,000 euros per person.
- Expenses deriving from the use of technical industries and other suppliers.
Deduction percentages and maximum deduction amount
The deduction amount will be:
a) In general
- 30% of the first million of the deduction base.
- 25% of the excess of said amount
The deduction will be applied provided that such expenses incurred in Spanish territory are at least 1 million euros. However, in the case of animation productions, the amount of such expenses is set at at least 200,000 euros.
The amount of this deduction may not exceed 10 million euros for each production carried out.
Likewise, article 36.2 of the LIS also establishes that the amount of this deduction, together with the rest of the aid received by the taxpayer, may not exceed 50% of the cost of production .
b) When the producer is responsible for the execution of visual effects services and the expenses incurred in Spanish territory are less than 1 million euros: From 30 percent of the deduction base.
The amount of this deduction may not exceed the amount established by Commission Regulation (EU) 1407/2013, of December 18, 2013, relating to the application of articles 107 and 108 of the Treaty on the Functioning of the European Union to the aids of "minimis" .
In short:
| Deduction percentage | Maximum amount | Deduction base | |
|---|---|---|---|
| 30% |
When the producer is responsible for the execution of visual effects services and the expenses incurred in Spanish territory are less than €1 million |
It may not exceed the amount established for "de minimis" aid by Regulation (EU) 1407/2013 |
The following expenses incurred in Spanish territory directly related to production:
|
| 30% | Up to €1 million of deduction base |
€10 million for each production made Requirement: The deduction will be applied provided that the expenses incurred in Spanish territory are at least €1 million. However, in the case of animation productions, the amount of such expenses is set at least at €200,000. |
|
| 25% | On the excess of 1 million € | ||
Limits
This deduction is excluded from the joint limit (25/50 percent) provided for in article 39.1 LIS for deductions to encourage the performance of certain activities and, therefore, this deduction for expenses related to the execution of a foreign production is not included in the calculation of said limit.
Finally, please note that, in the event of insufficient quota in the application of this deduction of article 36.2 of the LIS , the possibility of being able to request its payment to the Administration that is granted in article 39.3 of the LIS , is not applicable to the IRPF , in accordance with the provisions of article 68.2 of the Law of IRPF