Producers with tax domicile in the Canary Islands who are in charge of executing a foreign production (production service companies) benefit from a 50%¹ deduction on the first million elegible expenditure and 45% on the rest of elegible expenses in the Canaries. The minimum expenditure is €1 million, while the minimum expenditure for international productions performing animation work in the Canary Islands is only €200,000.
This incentive is capped at €12,4 million2.
1. Up to 54% on the first million euros when expenses in the Canaries exceed 1.900.000€
2. Publication pending future legislative amendments: increased maximum deduction up to 18 million €
What kind of productions qualify?
Foreign productions of feature films and TV series of live action, animation and documentaries are included. The audiovisual productions (feature and series) cannot be considered to be Spanish.
The productions that qualify for this deduction must have a minimum global budget of €2 million.
What kind of expenditure is eligible?
Expenses in the Canary Islands directly related to the production:
- Expenditure on creative staff provided that their tax residence is in Spain or in a European Economic Area Member State, capped at 100,000€ per person.
- Expenditure on technical industries and other suppliers.
You can find a full list of eligible expenditure in this binding consultation.
Who can benefit from this deduction?
Production companies or production service companies whose tax domicile is in the Canary Islands and are registered in the Film and Audiovisual Arts Institute (ICAA) and have executed a foreign film.
How do I get the tax deduction?
The amount of the tax break (50-45% of eligible expenditure) is deducted from the corporate income tax in the tax period in which the production service is completed.