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 film productions made in the Archipielago. This makes Tenerife one of the best places in Europe to welcome shootings, as in addition to these economic benefits, the island boasts excellent climate, natural resources, varied landscapes, a solid film industry with the latest equipment and qualified, seasoned professionals.
Canarian (REF) increases 20 percentage points the allowance of the Corporate Income Tax (2) for film productions and the limits are increased by 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 36 million euros deduction for feature films and 18 million euros per episode for series.
Also, film productions, except for commercials, filmed through by hiring a production service company are entitled to 0% IGIC and no IVA (VAT).
Download the TAX INCENTIVES GUIDE.
(1) Law 20/1991, 7th June, amending Tax Aspects of the Canary Islands Economic and Fiscal Regime (article 94) and Law 19/1994, 6th July, amending the Canary Islands Economic and Fiscal Regime (consolidated text). (Disposición adicional 14ª).
(2) Law 27/2014, 27th November, Corporate Income Tax. (consolidated text).