Spain Film Tax Rebate: How Producers and Investors Can Benefit from Article 39.7 LIS
The Tax Rebate in Spain for film and audiovisual series allows national and international producers and investors to apply significant tax deductions for investment in film in Spain, based on articles 36 and 39.7 of the Corporate Income Tax Act (LIS). In this section we explain in practical terms how this incentive works, what requirements the Tax Administration demands and how to correctly structure financing in order to maximise the tax benefit.
| Element | Description | Legal basis |
|---|---|---|
| Instrument | Tax deduction in Corporate Income Tax for investment in audiovisual productions | Arts. 36 and 39.7 LIS |
| Beneficiaries | Producers and investors (resident and non-resident) who meet the requirements | LIS and specific audiovisual regulations |
| Objective | To encourage the shooting of films and series in Spain and attract international investment | Audiovisual incentive policy |
According to article 39.7 of the Corporate Income Tax Act, taxpayers who participate in the financing of Spanish film productions, short films and audiovisual series of fiction, animation or documentary produced by other taxpayers, may apply the deductions provided for in sections 1 and 2 of article 36 of said Act, under the same conditions and requirements indicated in those sections. For a more general overview of these deductions, you can also read: tax deductions for film in Spain (Tax Credit and Tax Rebate).
| Subject | Right to deduction | Key conditions |
|---|---|---|
| Financing taxpayer | May apply deductions in arts. 36.1 and 36.2 LIS | Participates in the financing of a Spanish production of another taxpayer |
| Producer | Applies the part of the deduction not used by the investor | No double deduction on the same expense |
| Eligible works | Feature films, short films and series of fiction, animation or documentary | Spanish nationality and cultural requirements |
The amount is determined under the same conditions that apply to the producer, provided that the costs were incurred by the producer and used to cover all or part of the production costs, as well as the expenses incurred for obtaining prints, advertising or promotion up to a limit of 30% of the production cost. However, the intellectual property rights resulting from the productions are not acquired by the financier: they must remain with the producer at all times.
| Concept | Treatment | Limits |
|---|---|---|
| Production costs | Form part of the base on which the deduction is calculated | Incurred by the producer |
| Prints, advertising and promotion | May form part of the deduction base | Up to 30% of the production cost |
| Intellectual property | Not transferred to the financier merely by contributing funds | Remains with the producer |
The amount used to finance production costs may be contributed at any time during the production, either before or after the producer incurs such costs and up until the certificates of nationality and cultural character provided for in article 36 of the Act have been obtained. The amount used to finance the costs of obtaining prints, advertising and promotion incurred by the producer may be contributed before or after such expenses are incurred, but not after the tax period in which the producer incurs them.
| Type of expense | When it can be contributed | Time limit |
|---|---|---|
| Production costs | Before or after incurring the expense | Until obtaining nationality and cultural certificates |
| Prints, advertising and promotion | Before or after the expense | Cannot be contributed after the end of the tax period in which the expense is incurred |
The maximum amount that a producer may deduct and that the taxpayer participating in the financing may apply to an audiovisual work is obtained by multiplying by 1.20 the amount that the producer has allocated to cover the production costs or the expenses incurred for obtaining prints, advertising and promotion at its own expense. Any excess of such costs may be applied by the producer who has generated the right to the tax deduction.
| Element | Description | Who can apply it |
|---|---|---|
| 1.20 multiple | 1.20 × amount financed by the taxpayer in eligible costs | Taxpayer participating in the financing |
| Excess over that maximum | Part of the base that exceeds the 1.20 financed | Deducted by the producer who generates the right |
The producer and the taxpayers participating in the financing of the production are required to sign one or more financing agreements, which may be entered into at any time during production, and must contain the following requirements:
- a) Identity of the taxpayers participating in both the production and the financing.
- b) Description of the production.
- c) Production budget including detailed expenses, specifically those incurred in Spanish territory. It must also include the budget for the costs of obtaining prints, advertising and promotion borne by the producer with a detailed description of those to be incurred in Spanish territory.
- d) Description of the way in which the production and the costs of obtaining prints, advertising and promotion borne by the producer are financed, with a detailed description of those incurred in Spanish territory.
| Letter | Content | Practical purpose |
|---|---|---|
| a) | Identity of producers and investors | Clearly identify the parties involved |
| b) | Description of the audiovisual production | Define the work that generates the right to deduction |
| c) | Detailed budget and expenses in Spain | Justify the deduction base and the national component |
| d) | Form and schedule of financing | Link contributions to production and promotion milestones |
In order for the deduction to be applied, the taxpayer participating in the financing must submit the financing agreement and a certificate evidencing compliance with the requirements in article 36.1 of the Corporate Income Tax Act (certificate of nationality and certificate accrediting cultural character issued by the Institute of Cinematography and Audiovisual Arts or a similar body of the Autonomous Communities, and deposit of a copy in the Spanish Film Archive or a recognised Autonomous Community film archive) by means of a communication to the Tax Administration signed by the producer and the taxpayer participating in the financing. This communication must be made before the end of the tax period in which the producer is entitled to apply the tax deduction.
| Document | Who submits it | Key deadline |
|---|---|---|
| Financing agreement | Producer + financing taxpayer | Before the end of the tax period in which the right to deduction arises |
| Certificate of nationality | Producer | Prior to applying the deduction |
| Certificate of cultural character | Producer | Prior to applying the deduction |
| Accreditation of copy deposit | Producer | Spanish Film Archive or recognised regional film archive |
If the taxpayer participating in the financing is related to the taxpayer entitled to the deduction, the tax deduction does not apply.
Persons or entities are considered related according to Art. 18 of the LIS:
- a) An entity and its partners or shareholders.
- b) An entity and its directors or members of the board.
- c) An entity and the spouses or relatives in direct line by blood or marriage up to the third degree of partners, directors or shareholders.
- d) Two entities belonging to the same group.
- e) An entity and directors or board members of another entity when both belong to a group.
- f) An entity and another entity that holds at least 25% of the share capital or equity of the former.
| Letter | Type of relationship | Example in audiovisual productions |
|---|---|---|
| a) | Entity – partners or shareholders | Production company and its majority investor partner |
| b) | Entity – directors or board members | Board member who also acts as financier |
| c) | Entity – relatives of partners/board members | Spouse of a partner who channels the investment |
| d) | Entities in the same group | Two production companies in the same holding |
| e) | Entity – directors of another group entity | Common board member across several related producers |
| f) | Shareholding ≥ 25% in capital or equity | Company holding 30% of another producer |
The tax deduction applied by the taxpayer participating in the financing is incompatible with the deduction to which the producer is entitled, whether in full or in part. In other words, if the investor applies a deduction for an audiovisual production, the amount contributed cannot also be deducted by the producer: it is not possible to deduct the same expense twice. If the investor has applied the deduction on the total amount financed, the producer is no longer entitled to a deduction; if only part has been deducted, the producer may deduct the remaining amount.
| Scenario | Who deducts | Consequence |
|---|---|---|
| Investor deducts 100% of the financed portion | Investor only | Producer cannot apply a deduction for those expenses |
| Investor deducts partially | Investor + producer | Producer only deducts the part not used by the investor |
| Attempt at double deduction | Not allowed | Adjustment upon audit by the Tax Administration |
The amount of the deduction applied by the taxpayer participating in the financing may not exceed the limit of 25% of the tax payable, as established in article 39.1 of the LIS, except that it may be increased to 50% when the amount of the deduction that may be applied by the taxpayer participating in the financing is equal to or greater than 25% of its gross tax liability after other deductions or reliefs.
| Situation | Limit on gross tax liability | Comment |
|---|---|---|
| Aggregate deduction < 25% of liability | Maximum 25% | General regime |
| Aggregate deduction ≥ 25% of liability | Up to 50% | Increased limit for projects with high investment |
| Accumulation with other deductions and reliefs | Computed before this limit | Reference is gross tax liability minus other incentives |
Which investments in Spanish film productions give the right to a tax deduction (“Tax Rebate”)?
According to article 36 section 1 of the Corporate Income Tax Act, investment in Spanish film productions and audiovisual series of fiction, animation or documentary that enable the creation of a physical medium prior to industrial serial production grants a tax deduction to the producer and to taxpayers participating in the production.
| Type of work | Basic requirement | Beneficiaries |
|---|---|---|
| Spanish feature films and short films | Prior physical medium and nationality requirements | Producer and participating investors |
| Series of fiction, animation or documentary | Spanish production and prior physical medium | Producer and participating investors |
What tax deductions (“Tax Rebate”) can be obtained in Spain for Spanish film productions?
Spanish productions may deduct part of their costs in Corporate Income Tax, up to 30% of the deduction base up to one million euros, and 25% of the amount that exceeds one million euros, under the general regime in Spain. This analysis is expanded in our full guide on tax deductions for film in Spain (Tax Credit and Tax Rebate).
| Base bracket | Deduction percentage | Scope |
|---|---|---|
| Up to €1,000,000 of base | 30% | General state regime |
| Base exceeding €1,000,000 | 25% | Excess over the first million |
Production cost and the expenses for prints, promotion and advertising constitute the deduction base. Expenses for prints, advertising and promotion may not exceed 40% of the production cost. At least 50% of the deduction base must correspond to expenses incurred in Spanish territory.
| Concept | Included in base | Limit or condition |
|---|---|---|
| Production cost | Yes | Main element of the base |
| Prints, promotion and advertising | Yes | May not exceed 40% of the production cost |
| Expenses in Spanish territory | At least 50% of the base | Mandatory condition to apply the incentive |
The maximum deduction per production is 20 million euros. The maximum deduction for series is 10 million euros per episode.
- In cases of co-production of an audiovisual work, the amount that can be deducted is determined for each co-producer based on its percentage participation in the production.
- The tax deduction mentioned may be combined with other aid received for the same production, but the combination may not exceed 50% of the production cost. For detailed information on national and regional grants, see: grants for film in Spain for feature films and short films.
- For short films, the limit may reach up to 85%.
- Up to 80% for productions carried out by people who have not previously directed or co-directed more than two films classified as commercial in cinemas, with a budget under 1,500,000 euros.
- Up to 80% for productions shot entirely in any of the co-official languages other than Spanish.
- Up to 80% for productions directed by people with a disability level of 33% or more.
- For productions made exclusively by female directors, up to 75%.
- Up to 75% for productions with special cultural or artistic value.
- For documentaries, up to 75%.
- For animated works with a production budget under 2,500,000 euros, up to 75%.
- Up to 60% for cross-border productions financed by an EU Member State with participation of producers from more than one Member State.
- Up to 60% for international co-productions with Latin American countries.
| Type of production / case | Global limit on cost | Comments |
|---|---|---|
| General production | 50% | Sum of aid + deductions |
| Short films | Up to 85% | More favourable regime |
| Productions in special cases (co-official languages, new directors, disability, women directors, cultural value, documentaries, small animation) | Between 75% and 80% | Depending on each specific case and aid regulations |
| EU / Latin American co-productions | Up to 60% | Requires specific international structure |
What requirements are needed to obtain a tax deduction (“Tax Rebate”) for Spanish film productions?
- The production must obtain the certificate of nationality and the certificate of cultural character of its content, linked to Spanish cultural reality or contributing to the enrichment of the cultural diversity of films exhibited in Spain, issued by the Institute of Cinematography and Audiovisual Arts (ICAA).
- A new and perfect copy of the audiovisual work produced must be deposited in the Spanish Film Archive or an officially recognised film archive of the corresponding Autonomous Community.
| Requirement | Body | Function |
|---|---|---|
| Certificate of nationality | ICAA / regional authority | Accredit that the production is considered Spanish |
| Certificate of cultural character | ICAA / regional authority | Link the work to Spanish cultural reality or cultural diversity |
| Deposit of a copy | Spanish Film Archive / recognised regional archive | Ensure preservation of the work |
How is the certificate of nationality obtained?
Cinematographic films and other audiovisual works must have Spanish nationality in accordance with the provisions of article 5 of Law 55/2007, of 28 December.
- At least 75% of the team of authors (director, screenwriter, director of photography and music composer) must be Spanish nationals or nationals of other EU or EEA Member States, or hold a valid residence permit in Spain or in those States. The director must always meet this requirement.
- At least 75% of actors/actresses and other performers must meet the above nationality or residence requirements.
- At least 75% of the technical and creative staff must meet these requirements.
- The work is preferably produced in its original version in any of the official languages of the Spanish State.
- The shooting, except where otherwise required by the script, and the studio post-production and laboratory work are carried out in Spanish territory or in another EU Member State. In animated works, the production processes must also be carried out in those territories.
Works produced in the form of co-production with foreign companies are also considered Spanish cinematographic or audiovisual works, in accordance with specific regulations or applicable international treaties. If you are considering a co-production, you can find more information about aid requirements in general and selective grants for film in Spain.
| Area | Minimum threshold | Example |
|---|---|---|
| Main authors | ≥ 75% with EU/EEA nationality or residence | Director, screenwriter, DoP and music composer |
| Actors and performers | ≥ 75% | Main and supporting cast |
| Technical and creative staff | ≥ 75% | Production, editing, art, make-up, etc. |
| Original language | Official languages of the State | Spanish or co-official languages |
| Shooting and post-production | Preferably in Spain or the EU | Recognised studios and laboratories |
How is the certificate accrediting cultural character obtained?
According to article 22 of Royal Decree 1084/2015, in order for an audiovisual production to obtain the tax deduction it must, as a necessary requirement, accredit its cultural character. The certificate is granted by the ICAA at the request of the producer(s).
- The work has as its original version any of the co-official languages of Spain (or an official EU language in co-productions).
- The content is mainly set in Spain.
- The content is related to literature, music, dance, architecture, painting, sculpture or an artistic expression.
- The script is an adaptation of a pre-existing literary work.
- The content has a biographical character or reflects historical facts or figures.
- It includes stories, facts or legendary or mythological characters that form part of a cultural heritage or tradition.
- It provides better knowledge of cultural, social, religious, ethnic, philosophical or anthropological diversity.
- The content is related to Spanish social, cultural or political reality or affects it.
- One of the main characters or several secondary characters have a direct link to Spanish social, cultural or political reality.
- The work is specifically aimed at children or young audiences and contains values in line with educational regulations.
| Criterion | Example | Relation to the incentive |
|---|---|---|
| Original language | Feature film shot in Basque or Catalan | Strengthens the cultural character |
| Setting in Spain | Story set in a Spanish city | Direct link with cultural reality |
| Relation to the arts | Film about a Spanish painter or musician | Contribution to cultural heritage |
| Educational and social value | Content for young audiences on diversity | Reinforces the social function of film |
Special regimes: Canary Islands, Basque Country and Navarre
Tax deduction for Spanish film productions in the Canary Islands
The Canary Islands offer one of the most advantageous regimes in Europe. You can see a detailed analysis in: tax deductions for audiovisual productions in the Canary Islands.
- Up to 50% deduction on the first million of the deduction base of eligible costs.
- The percentage may be increased to 54% if certain requirements are met and 45% on the excess.
- Requires the Canary Islands Audiovisual Production Certificate, minimum expenditure in the Canary Islands/Spain, and maximum deduction limits per feature film or episode.
| Concept | Percentage / condition | Comments |
|---|---|---|
| First million of base | Up to 50% (54% in certain cases) | Requires Canary Islands certificate and spending requirements |
| Excess over €1M | Around 45% | Applies to the amount exceeding the first million |
| Additional requirements | Minimum spend in the Canary Islands and Spain | Controlled by Canary Islands and state authorities |
Tax deduction for Spanish film productions in the Basque Country
In the Basque Country (and in particular in Bilbao) there are specific incentives that we explain in: tax incentives for audiovisual works in Bilbao (Tax Credit).
- It can reach up to 60%/70% of the production cost in certain cases.
- The percentage depends on the proportion of expenditure made in the territory of the Basque Country.
- Requires a cultural certificate and deposit of a copy in the Basque Film Archive or equivalent body.
| Element | Details | Approximate impact |
|---|---|---|
| Deduction percentage | Between 60% and 70% of cost depending on the case | Highly competitive at European level |
| Local spend condition | High proportion of expenditure in the Basque Country | Higher local expenditure, higher incentive |
| Technical requirements | Cultural certificate + deposit in Basque Film Archive | Aligned with state requirements |
Tax deduction for Spanish film productions in Navarre
Navarre offers its own regime, which we detail in: tax deduction for investments in cinematographic films and other audiovisual works in Navarre.
- General tax deduction of 45% of the production cost.
- May reach 50% on the first 3 million of the base in specific cases (original version in Basque, women directors, documentaries, animation, new directors).
- Maximum deduction limit of 5 million euros per production.
| Concept | Percentage / limit | Notes |
|---|---|---|
| General deduction | 45% of cost | Applies to most productions |
| Enhanced cases | Up to 50% on first €3M | Basque language, women directors, animation, documentaries, new directors |
| Limit per production | 5 million euros | Maximum per work |
Who can obtain a tax deduction (“Tax Rebate”) for foreign film productions?
According to article 36.2 of the LIS, producers registered in the Administrative Register of Cinematographic and Audiovisual Companies of the ICAA who are responsible for the execution of a foreign film production or other audiovisual works enabling the creation of a physical medium prior to industrial serial exploitation are entitled to a tax deduction for the expenditure incurred in Spanish territory.
| Subject | Main requirement | Deduction base |
|---|---|---|
| Spanish executive producer | Registration with the ICAA register | Expenditure incurred in Spain for the foreign production |
| Foreign productions | Physical medium prior to serial production | Shooting, technical services and post-production work |
Which expenses in Spanish territory constitute the deduction base for foreign film productions?
- Expenses on creative staff with tax residence in Spain or in an EEA Member State.
- Expenses from the use of technical industries and other suppliers in Spanish territory.
| Type of expense | Examples | Condition |
|---|---|---|
| Creative staff | Direction, cinematography, music composition, production design | Tax residence in Spain or the EEA |
| Technical industries | Camera, lighting, grip rental, studios, post-production | Supplier established in Spain |
What tax deductions (“Tax Rebate”) can be obtained in Spain for foreign film productions?
- 30% on the first million of the deduction base, and 25% on the excess. Expenditure incurred in Spain must be at least 1 million euros (200,000 in animation). The amount of the deduction may not exceed 20 million per production, or 10 million per episode in audiovisual series.
- 30% of the deduction base when the producer is in charge of the execution of visual effects and expenditure in Spain is less than 1 million euros, subject to the limit established in EU Regulation 1407/2013.
| Case | Percentage | Limits |
|---|---|---|
| General foreign production | 30% up to €1M; 25% on the excess | Minimum spend €1M (200,000 in animation) · Max. €20M per work / €10M per episode |
| Visual effects (VFX) only | 30% | Expenditure < €1M, de minimis limit under Regulation 1407/2013 |
What requirements are needed to obtain a tax deduction (“Tax Rebate”) for foreign film productions?
- The production must obtain the certificate accrediting its cultural character related to its content or its link to Spanish or European cultural reality, issued by the ICAA or the relevant regional authority. This requirement does not apply to the specific deduction for visual effects.
- The end credits must include a specific reference to the tax incentive, the collaboration of the Government of Spain, the Autonomous Communities and the Film Commissions or Film Offices involved in the shooting and production carried out in Spain.
- The rights holders must authorise the use of the title and graphic and audiovisual press material, including shooting locations and production processes in Spain, for cultural or tourism promotional activities and materials organised by public entities and Film Commissions / Film Offices.
| Requirement | Application | Exception |
|---|---|---|
| Certificate of cultural character | Content linked to Spain or Europe | Not required for isolated VFX deductions |
| Mention of the incentive in credits | Reference to the Government of Spain, Regions and Film Commissions | Must follow public administration guidelines |
| Authorisation to use materials | Images and clips for cultural and tourism promotion | Use limited to public entities and Film Offices |
Which services does CAMALEÓN CINEMA SERVICES offer to producers and investors?
CAMALEÓN CINEMA SERVICES is a company with a proven track record of more than ten years in the production of audiovisual works. From our film and commercial production company in Spain we advise our clients, whether national and international production companies or investors in audiovisual production, on all available incentives.
- Tax deductions (“Tax Rebate”) in Spain and in those Autonomous Communities that offer better tax deductions. We provide information and advisory services to obtain the maximum financial return for both producers and investors.
- Advisory services and management of grants and subsidies for film and audiovisual works in Spain (national and regional), as well as specific regimes in territories such as the Canary Islands, Navarre or Bilbao / the Basque Country.
- Co-productions and financing structures so that each project can maximise its financial potential, including international co-productions of feature films and series with Spanish producers.
- Full production services for shoots in Spain, including top-level audiovisual infrastructure and personnel, search and adaptation of locations, permits processing, logistical and technical coordination, on-set supervision and access control, among other pre-production, production and post-production services.
If you are considering an investment or co-production of films with Spain, at CAMALEÓN CINEMA SERVICES, film and commercial production company, we can support you throughout the process: designing the financing structure, optimising tax deductions (Tax Rebate) and managing the production of the shoot.
Frequently asked questions about tax deductions (Tax Rebate) for film in Spain
What is the Tax Rebate in Spain for film and series?
The Tax Rebate in Spain is a tax deduction for investment in film and audiovisual series that allows producers and investors to deduct a percentage of production costs and expenses for prints, advertising and promotion from their Corporate Income Tax, according to articles 36 and 39.7 LIS.
What deduction percentage can be obtained?
In general, the tax deduction allows you to apply up to 30% of the deduction base on the first million euros and 25% on the excess. There are enhanced regimes in territories such as the Canary Islands, the Basque Country and Navarre, where the percentages may be higher if certain requirements are met.
Who can benefit from tax deductions for investment in film in Spain?
Both registered producers and taxpayers participating in the financing of Spanish and foreign film and audiovisual series productions may benefit, provided they meet the requirements regarding expenditure in Spain, certificates of nationality and cultural character, and properly structure financing agreements.
What is the difference between Spanish and foreign productions for Tax Rebate purposes?
In Spanish productions, the deduction is linked to the production cost and the cost of prints, advertising and promotion, provided that a significant part of the expenditure is incurred in Spain. In foreign productions, the incentive focuses on expenditure incurred in Spanish territory (creative staff, technical suppliers, visual effects, etc.) by a producer registered with the ICAA.
Tax deductions (Tax Rebate) for investment in film in Spain (art. 39.7 LIS) – summary
Spain has become one of the most attractive destinations for national and international shoots thanks to its incentives and tax deductions for film and audiovisual series productions. For an overview, we also recommend our article on tax deductions for film in Spain (Tax Credit and Tax Rebate).
In this article we have explained, in practical terms, how tax deductions (Tax Rebate) regulated in articles 36 and 39.7 of the Corporate Income Tax Act (LIS) work, both for Spanish and foreign productions, and which requirements national and international producers and investors must meet to benefit from these incentives. To explore complementary aid and subsidies in more detail, you can also check general and selective grants for film in Spain for feature films and short films.
