A company doing production activities and activities related to the film sector can be established as a ZEC company and pay a reduced rate of 4% on Corporate Income Tax instead of the general 25% rate currently in force in Spain, provided that they meet the following requirements. ZEC companies can carry out a wide range of activities in the film sector like:


  • Film, video, radio and television programmes

Production services, on set assistance and post production

  • Casting, location services and dubbing
  • Publishing and reproducing film copies and recordings
  • Reproduction and film duplicates, compositing and photoengraving
  • Brokering services to obtain contracts

Phoography and advertising

  • Photography and film developing
  • Directing catalogues, publications and promotional materials
  • Creating and carrying out advertising campaigns

Film distribution

Requirements to be a ZEC company:

  1. To be a new company or branch
  2. At least one of the administrators must reside in the Canary Islands.
  3. Invest a minimum of 100,000 € /50,000 € (depending on whether the activity takes place in a capital island –Tenerife or Gran Canaria – or in one of the smaller islands).
  4. Create at least 5 jobs / 3 jobs (depending on whether the activity takes place in a capital island –Tenerife or Gran Canaria – or in one of the smaller islands).
  5. The objects of the company must be one of the ZEC authorized activities.

Benefits a ZEC company enjoys:

  1. Reduced tax rate of 4% on Corporate Income Tax as opposed to the 25% currently in force.
  2. Exempted from the Property Transfer and Stamp Duty Tax.
  3. Exempted from IGIC on import (both of raw materials and investment materials or finished products), and exemption in operations with other ZEC companies.
  4. The Double Taxation Avoidance Agreements apply as well as the exemption at origin on taxes for capital repatriation through the application of the parent-subsidiary directive. Therefore, dividends sent from the ZEC company to the parent company outside Spain would be exempted from paying tax at source, applying the International Double Taxation Agreement at destination.
  5. The restriction to apply the deduction on double domestic taxation on dividends has been lifted.

This ZEC tax incentive – compatible with the tax incentives for film productions described in this document – was authorized by the European Commission in 2000, to encourage the economic and social development of the archipelago. For further information