The Canary Islands enjoy a special tax regime due to their geographical distance from the rest of Spain. In order to encourage economic and social development, the islands offer a set of tax allowances which are successfully applied to film production.
The approval of the new Canarian Economic and Tax Regime (REF) (1) , which came into force on 1st January 2015, has an impact on the tax advantages for audiovisual productions made in the Archipielago. This makes Tenerife one of the best places in Europe to welcome shootings, because the economic benefits are added to the climate, natural resources, varied landscapes and a solid audiovisual sector with the latest equipment and also qualified professionals with enough experience to assist any need.
Canarian (REF) increases 20 percentage points the allowance of the Corporate Income Tax (2 & 3) for film productions and the limits 80%. Therefore, the tax credit for Spanish productions goes from the 20-25%, capped at 3 million euros deduction in Spain to 45-40% tax credit, limited to 5.4 million euros. And for foreign productions, the 20% tax rebate with a limit of 3 million euros changes to a 40% tax rebate with a limit of 4.5 million euros.
(1) RDL 15/2014, 19th December, ammending the Canary Islands Economic and Fiscal Regime
(2) Law 27/2014, 27th November, Corporate Income Tax.
(3) Law 3/2017, 27th June, General State Budget