The regulations of the Corporate Tax (IS) offer an attractive tax incentive for companies seeking to reduce their taxation through investments in film productions, audiovisual series, and live performances. This deduction not only promotes the cultural sector but also provides companies with an effective tool to reduce their tax burden.

Article 36 of the Corporate Tax Law regulates this deduction, allowing companies to benefit fiscally by participating in the financing of film and audiovisual productions, as well as live performances. Companies can directly apply this deduction, thus obtaining a significant reduction in their taxes, without needing to structure their investment through an Economic Interest Grouping (AIE), as was previously the case.

What benefits does this deduction entail?

Companies can deduct, within certain limits, up to 30% of the production cost for the first million of the deduction bases, and 25% on the excess. This translates into a lower tax burden, freeing up financial resources that can be reinvested in the business.

The maximum amount of the deduction has recently been significantly increased, now reaching up to 20 million euros. This allows companies with larger investments to obtain substantial tax benefits.

In addition to the general benefit, there are higher deductions for certain types of productions, such as short films, works by new directors, or productions entirely directed by women or filmed in one of the co-official languages other than Spanish.

For companies with profits, investing in the film and audiovisual sector not only represents an opportunity to contribute to national culture and economy but also is a fiscally efficient strategy. Taking advantage of this deduction allows tax reduction and maximization of economic benefits, positioning companies advantageously in the market.

Once the Corporate Tax return for the 2023 fiscal year has been filed, now is the ideal time to consider this type of investment before the end of the 2024 fiscal year, to take advantage of this deduction in the corresponding tax return.

At addwill, we have a team of lawyers specialized in corporate taxation who can advise and assist you in both selecting the productions in which to invest and applying the deduction in your Corporate Tax return.

You can contact us via email at comunicacio@addwill.eu, phone +34 93 487 52 00, or by clicking here.