For Spanish productions made in the Canary Islands and with the certificate of Canaries Audiovisual Work*, deduction percentages are 45% for the first million Euros, and 40% from the second million, capped at 5.4 million euros (so the maximum deduction base is 13,375,000€). (1), (2) and (4).
What type of production qualifies for the allowance?
Films for cinema release
TV, animation and documentary series
Provided that those productions obtain the Canaries Audiovisual Work* certificate, granted by the Government of the Canary Islands through Canarias Cultura en Red, as well as the other certificates of Spanish nationality and culture, granted by the Institute of Cinematographic and Audiovisual Arts (ICAA).
What kind of expenses can be deducted?
The deduction base consists on the total cost of the production including the cost of making copies and publicity and promotion expenses –which are capped at 40 per cent of the cost of production- met by the producer. Grants obtained to finance investments qualifying for deduction are not deductible. At least 50% of the deduction base should correspond to expenses made in Spanish territory.
Who can benefit from the tax credit?
Investors whose economic activity is settled in the Canary Islands.
* Canaries Audiovisual Work Certificate
In order to obtain this certificate, the company must be registered in the Canaries Audiovisual Companies Registry. The production must have Spanish nationality in addition to fulfilling the following requirements:
Shoot a minimum of two weeks in the Canaries, either interiors or exteriors
Hire local professionals (minimum one head of department, a leading or supporting actor resident in the Canaries)
Co-productions will be considered Canaries productions whenever the Canaries producer provides above 20% of the cost of the production
In the case of financial co-production, the Canaries co-producer’s contribution will not be under 10% or above 25% the cost of the production.
More information through our advisory firms and Proexca
1) RDL 15/2014, 19th December, ammending the Canary Islands Economic and Fiscal Regime
2) Law 27/2014, 27th November, Corporate Income Tax
3) Under the Spanish Film Act a Spanish film is that made by a Spanish production company or that made as co-production and which has been granted the Spanish nationality certificate by the ICAA (Law 55/2007, 28th December, Cinema)
4) Law 3/2017, 27th June, General State Budget