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

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.

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.

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.

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.

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.

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.

National shootings & co-productions

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

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.

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.