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 & 4) , 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, 5 & 6) for film productions and the limits 80%. Therefore, the tax incentives for foreign and Spanish audiovisual productions go from the 30-25%, in Spain to 50-45% tax incentives, though it may reach 54% for certain film productions. Both tax incentives are capped at 18 million euros deduction.
Also, film productions, except for commercials, which are made by hiring a production service company are entitled to 0% IGIC and no IVA (VAT).
(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.
(4) Law 8/2018, 5th November, ammending the Canary Islands Economic and Fiscal Regime.
(5) Royal Decree-law 26/2018, of 28 December, approving the emergency measures on artistic and film creation.
(6) Royal Decree-law 17/2020, of 5 May, approving support measures for the cultural sector and tax measures to deal with the economic and social impact of the COVID-2019