Tax
Incentives
Spanish productions and international co-productions may benefit from corporate tax deductions once they have obtained the certificates of Spanish nationality and cultural interest issued by the ICAA, and a copy has been deposited with the Spanish Film Archive or with a film archive officially recognized by an Autonomous Community.
Spanish productions and international co-productions may qualify for corporate tax deductions once they have obtained the certificates of Spanish nationality and cultural interest issued by the ICAA (Institute of Cinematography and Audiovisual Arts), and deposited a copy with the Spanish Film Archive or with a film archive officially recognized by an Autonomous Community.
The regulations on tax incentives for filming in Spain are set out in the Law 27/2014, of 27 November, on Corporate Income Tax. Tax deduction for investments in film productions, audiovisual series, and live performances of performing and musical arts
Basic Information Sheet
International Productions
Andalucía offers tax incentives for international films and TV series which, in addition to the benefits offered by this country and its audiovisual industry, make it one of the most competitive destinations of the area. The current applicable legislation in Spain is: Article 36.2 Law 27/2014 dated the 27th of November, on Corporation Tax ‘Rebates for investments in film and series audiovisual productions, live performances and musical shows’. (Last updated on May 6, 2020).
In any case, these incentives are applicable to any Spanish producer registered on the Ministry of Culture and Sport’s Film Company Register in charge of the foreign production. This means that the “service company” takes responsibility of the executive production and carries out the tax procedures needed to opt for the tax rebate.
Detailed Information
General Incentives
30% – 25% Tax Rebate
Foreign production types
Feature length films, tele vision series, animated films and documentaries.
Beneficiaries
Producers registered in the Registry of Cinematographic Companies of the Institute of Cinematography and Audiovisual Arts of Spain.
Minimum expense incurred in Spain
€ 1 million / € 200.000 for pre-production and post-production expenses for animation and VFX made in Spanish territory.
Maximum rebate limit
20 million euros for feature films and 10 million euros for TV series (per episode)
Eligible expenses
The expenses of creative staff, with tax residence in Spain or in a member state of the European Economic Area, and the expenses derived from the use of technical industries and other suppliers.
Requirements
For the application of the deduction, it will be necessary to meet the following requirements:
- That the production obtain the corresponding certificate that certifies the cultural character in relation to its content or its link with the Spanish or European cultural reality, issued by the Institute of Cinematography and Audiovisual Arts, or by the corresponding body of the Autonomous Community with competence in the matter. This requirement will not be required for the application of the deduction to visual effects services.
- That a specific reference to having benefited from the tax incentive be incorporated in the final credits of the production; the collaboration, where appropriate, of the Government of Spain, the Autonomous Communities, the Film Commissions or the Film Offices that have been directly involved in the filming or other production processes developed in Spain, as well as, where appropriate, the specific filming locations in Spain and, in the case of animation audiovisual works, the location of the studio that has been commissioned with the production service.
- That the holders of the rights authorize the use of the title of the work and of graphic and audiovisual material from the press that expressly includes specific locations of the filming or any other production process carried out in Spain, to carry out activities and elaboration of promotional materials in Spain and abroad for cultural or tourist purposes, which may be carried out by state, regional or local entities with powers in matters of culture, tourism and the economy, as well as by the Film Commissions or Film Offices that have intervened in the filming or production.
National Shoots and Co-Productions
Spanish productions and international co-productions can gain access to tax credit on Corporation Tax once they have obtained their Spanish nationality and cultural certificates issued by the ICAA, and once a copy of the production has been deposited at the Spanish Film Archive or in a film library officially recognised in an Autonomous Community.
The current applicable legislation in Spain is: Article 36.1. Law 27/2014 dated the 27th of November, on Corporation Tax. (Last updated on May 6, 2020). Tax Credit for investment in film and series audiovisual productions, live performances and musical shows. The laws which regulate these incentives can change every year, so it is worth finding out what, if any, aspects have changed, during the year you are making the investment.
Detailed Information
Spanish investments in film and audiovisual production are often carried out via an EIG (Economic Interest Grouping) which is set up as the film’s producer. These investments give the producer the right to a tax credit of 30% of the first million Euros, and 25% if the investment is higher.
The base for the deduction is equal to the total production cost plus the cost of copies, advertising and promotion financed by the producer (with a 40% limit of the production cost).
The law establishes a territorial requirement and 50% of the deduction base must correspond to the expenses incurred in Spain.
The cost of the deduction is 20 million euros for feature films and 10 million euros for TV series (per episode)
In the case of a co-production, the amounts will be determined for each co-producer, according to their respective share-percentage of the co-production.
Requirements
The amount of this deduction, together with the rest of the aid received, may not exceed 50 percent of the cost of production.(Except in some cases established in the regulation)
The law includes further details which are not listed here, so we do recommend you to read Article 36.1 in its entirety as well as the replies posted by the Inland Revenue Agency in response to the binding queries.
FAQs
Audio-visual productions which would like to benefit from tax incentives can be very complex and may feature special conditions which increase when several national and foreign companies participate in the same production. Tax rebate regulations are extensive and in some cases the production will need to make binding inquiries at the Inland Revenue’s general tax department to ensure they get the most out of these tax incentives.
These binding inquiries must be made by a company with a fiscal address in Spain. We recommend you contact the Inland Revenue offices in the region in which your production service company is registered to set up a meeting with the people responsible. If you can employ the services of a tax advisor with experience in the audiovisual sector, then that will speed up the process. The time involved in responding to binding inquiries varies from office to office.
Below are some frequently asked questions and their answers, obtained through binding inquiries of this type made at the relevant authorities over the last three years.
International shootings
What are the elegible costs related to creative personnel?
In order to calculate the application base for the tax incentive, creative personnel will be understood to be the following:
- Authors: the director, scriptwriter, photography director and the music composer.
- The actors and other artists taking part in a production.
- The technical creative personnel: the head installer, the artistic director, the sound director, the figurine maker and the head make-up artist.
All the above must be registered to pay tax in Spain or in the European Economic Area and expenses are limited to €100,000 per person.
What are the elegible expenses related to technical production and other providers?
The eligible technical production and provider costs are those carried out within Spanish territory and detailed below;
- Executive producer, producer and production assistant.
- Set design team expenses which have not been attributed as creative expenses and include: the set designer, decorators, florists, decoration assistant, set decorator, prop manager, carpenters etc. This also includes any equipment necessary for set design (construction materials, carpentry, paint, fabric etc).
- Costume and characterisation expenses: tailors, hairstylists, make-up artists etc. Costume, make-up and wig expenses etc are also eligible.
- Special effects equipment including special effects technicians, model makers etc, as well as pyrotechnic material, smoke-producing equipment, combustion accelerants, detonators, fire extinguishers.
- Camera team (camera operators, dolly grips, assistants etc) lighting and sound team.
- Technical telecommunications team, maintenance and image control team and any expenses derived from mobile phone connections, internet and satellite connections.
- Second team of artists: extras, action doubles, performing and lighting extras.
- Complementary staff: choreographers, weapon handlers, military advisers, dialogue coaches, animal trainers, drivers, cleaning professionals, security professionals, medical and ambulance professionals, safety in the workplace supervisor on set, workmen for unloading trucks and moving technical equipment and props.
- Room and board for the technical team during pre and post production as well as during the production itself.
- Room and board for the technical team working in a different location to the shoot: staff in charge of advance scouting for props, locations, production and drivers for transit.
- Transport and/or transfer of people, within national territory: locations and casting
- Rent and/or purchase of furniture and machinery directly related to the production: marquees, sunshades, portable tables, fences, generators etc.
- Shop and location rental for the shoot and production.
- Shoot fees payable to Town Halls.
- Expenses incurred through renting animals, weapons or ambulances for the shoot.
- Civil liability insurances with cover directly related to the film-making production.
What expenses are not elegible?
Different binding inquiries have determined which expenses are not eligible when it comes to calculating tax incentives. This is a non-definitive list of these expenses, and we recommend asking a specialised fiscal advisor and/or making an inquiry at your local Inland Revenue office.
- The cost of air, maritime and/or road transport of filming equipment, props and/or machinery to be used on set from countries other than Spain, as these are costs which are not incurred within Spanish territory.
- Employment and legal advisory services.
- Expenses incurred in relation to the administrative team. This includes shop rents (administrative offices), staff expenses (head accountant, accountant, paying accountant, and assistant accountant), renting office machinery and furniture (photocopy machines, printers, office furniture etc) and the purchase of office equipment, stationary and messenger services.
- Expenses incurred from tax depreciation of the assets directly affected by the executive production, as far as they are not expenses incurred within Spanish territory, but rather investments carried out abroad which are later affected by the production.
What tax period does the incentive apply to?
The Spanish service production company, registered with the ICAA, must present the settlement of all eligible expenses in the month of July of the fiscal year following the filming date.
Who can apply for the tax incentive?
A company which is registered in Spain, which is constituted as a local producer of a foreign feature length film, television series, animation or documentary, which pays Corporate Tax and is registered in the ICAA’s Register of Audiovisual Producers.
To access the incentives from Navarre or the Canary Islands, the company must have a registered fiscal address in one of the above two territories.
Are the incentives compatible with grants?
Tax incentives are compatible with different international, national and regional grants, as long as the total does not amount to more than 50 per cent of the total production costs.
There are exceptions to that limit, and it is worth asking a specialised tax advisor in each case.
International shootings
What is an Economic Interest Grouping (EIG)?
Spanish law establishes that an Economic Interest Grouping (Agrupación de Interés Económico, AIE, in Spanish) is a legal entity designed to make it easier to develop or improve activity and results for its members.
Its activity must be ancillary to that of its members, there must be a minimum of two members, and it has limited liability.
The group cannot own any shares in companies which are members of the group, either directly or indirectly, nor can it direct or control the activities of its members or third parties, either directly or indirectly.
It is a legal entity which is useful when it comes to developing audiovisual projects and can be the beneficiary of tax incentives from the country, if it complies with the following conditions
Can pilots receive incentives?
In order to be eligible to receive tax incentives, a pilot must comply with all the conditions established by the regulations for audiovisual projects, including type and limit of expenses, obtaining the certificates issued by the ICAA and depositing a copy of the production at the Spanish Film Archive or in an officially-recognised library in an autonomous community.
In any case, it is worth employing the services of a specialised tax advisor to help you make the relevant enquiries at the relevant authority.
Are the incentives compatible with grants?
Tax incentives are compatible with different international, national and regional grants, as long as the total does not amount to more than 50 per cent of the total production costs.
There are exceptions to that limit, and it is worth asking a specialised tax advisor in each case.
