50-45% Tax Credit Per Investment in Spanish Productions or Coproductions
Twenty points above the rest of Spain
What type of production qualifies for the allowance?
- Films for cinema release
- TV, animation and documentary series
- Short Films
Provided that those productions obtain the Canarian Certificate of Audiovisual Production***, granted by the Government of the Canary Islands through Instituto Canario de Desarrollo Cultural (ICDC) , 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.
What are other requirements to qualify?
The total of aids received by the taxpayer, including deductions and subsidies, cannot exceed, in general terms, 50% of the production cost. However, it is increased for several cases**:
a. Short films: 85%
b. Productions whose director has not directed or co-directed more than two films for commercial exploitation in movie theaters, and whose production budget does not exceed EUR 1.5 million: 80%
c. Productions entirely shot, shown or subtitled in any of the co-official languages other than Spanish: 80%
d. Productions directed exclusively by people with disabilities: 80%
e. Productions directed exclusively by women: 75%
f. Productions of special cultural value that require exceptional financial support according to criteria established by Ministerial Order or in the corresponding calls for grants: 75%
g. Documentaries: 75%
h. Animation works not exceeding a production cost of EUR 2.5 million: 75%
i. Crossborder productions financed by more than one Member State of the European Union and involving producers from more than one Member State: 60%
j. International co-productions with LATAM countries: 60%
The same investment cannot involve more than one deduction for the same company, nor can the deduction be applied to more than one company.
To have access to this deduction, and for greater legal certainty, you need to apply in advance to Agencia Estatal de Administración Tributaria (AEAT) [Inland Revenue Office] that will answer within 20 days.
*** Canarian Certificate of Audiovisual Production (4, 5)In order to obtain this certificate, the company must be registered in the Canary Islands Registry of Audiovisual Companies. The production must have Spanish nationality (3) in addition to fulfilling the following requirements:
Fiction feature films:
- 11 days for budgets below two million euros.
- 14 days for budgets from two to four million euros.
- 16 days for budgets from four to eight million euros.
- 18 days for budgets from 8 million euros on.
- Or 9 shooting days provided that there is a minimum proven expenditure of 15% of the budget on postproduction in the Canary Islands.
- 15% of production time in the Canaries for works with a budget above five million euros and 20% for works whose budget is below that figure.
- Rendering cannot exceed 20% of the production time.
- 20% of the season shooting time is shot in the Canaries.
- Or 15% of the season shooting time provided that there is a minimum proven expenditure of 15% of the budget on postproduction in the Canary Islands.
2. Hiring local professionals whose tax residency is in the Canary Islands. At least:
For feature films and drama series:
- A person from the creative staff (3) (Authors: director, scriptwriter, director of photography, score composer, actors and artistes and technical creative staff: chief editor, artistic director, sound engineer, costume designer, head editor, art director, head of sound, costume designer and head of prosthetic).
- Nine technical people from a minimum of five different work teams in production; locations, direction; camera; lighting and grip; sound; art; costume; make-up and hairdressing; special effects; postproduction and effects; stunts.
- A minimum of two people in the capacity of director, scriptwriter, score composer, director of photography or executive producer.
- A head of team, failing that, an animation lead, senior animator or dubbing actor of leading or supporting role.
3. Co-productions will be considered Canaries productions whenever the Canaries producer provides above 20% of the cost of the production.
4. 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.
5. Delivery of promotional material.
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) Decree 88/2019, of 22 May, amending Decree 18/2009, of 10 February, which creates the Canary Islands Registry of Audiovisual Companies and Works and governs the procedure to obtain the Canarian Audiovisual Work Certificate regarding feature films, short films and fiction series, animation or documentaries produced in the Canary Islands.
(5) Decree 18/2009, of 10 February, which creates the Canary Islands Registry of Audiovisual Companies and Works and governs the procedure to obtain the Canarian Audiovisual Work Certificate regarding feature films, short films and fiction series, animation or documentaries produced in the Canary Islands.