Tax incentives go up to 50 % for film productions in Tenerife and the Canaries

This measure is available to foreign and national productions

‘Hombres de leche’ (2019) shooting. Produced by Volcano Films

The Spanish Government passed a large package of measures to support the film industry in the wake of the situation caused by COVID-19.

The measures include an increase of the tax incentives for investing in national and foreign film and series, animation, and documentary productions. In the Canary Islands, the incentive now stands at 50% on the first million and 45% from then on, while in mainland Spain it is 30% on the first million and 25% from then on. 

The incentive system is the same as ever. That is, foreign productions will enjoy a 50%-45% direct deduction or tax rebate provided that they hire a company with tax residency in the Canaries for production services. The production company must spend at least 1 million euros on eligible expenditure that must be directly related to the shoot on the Island. As for post-production or animation services, more than 200,000 euros must be spent. The minimum total budget of any film production must be two million euros.  

Tenerife has a wide range of real image and animation production companies that have proven experience in film productions and in using these tax incentives.

On the other hand, the 50-45% tax credit for Spanish productions, which now includes short films too, requests the production company to have its tax residence in the Canary Islands but does not require a minimum budget or spend. The deduction base is capped at 50% of the total film budget but it is increased between 85 and 60% for certain films by novel directors, women directors, short films, animation (up to 2.5 million budgets), co-productions, special interest films and other cases. For this type of films, provided that they do not exceed intensity level, the Canary Islands tax break can reach 54 % tax credit.

The maximum limit of deduction quota in both incentives is 10 million euros in mainland Spain. In the Canaries, by virtue of the Tax and Economic Regime (Law 8/2018, of 5 November and Law 19/1994, of 6 July) the deduction limit would reach 18 million euros* (80% increase over mainland Spain). *This increase in the deduction quota pending legislative publication.

You can find more detailed information about these incentives on our website or call us at +34 647 346 462 or drop us a line at film@webtenerife.com

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