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Tax incentive

Come and film in Navarra and benefit from a 38% reduction in the rate for investments in Spanish feature-length film productions and audiovisual fiction, animation or documentary series.

Article 65 of the Navarrese company tax act, Law 26/2016, governs the tax incentive for film and audiovisual production. Since January 2015, the Navarrese tax incentive has been one of the most generous in Spain.

The tax incentive covers three main areas and always affects company tax, in the form of a tax deduction.

  • Producer or co-producer with tax domicile in the Navarra region (article 65.1).
  • Company with its tax domicile in the Navarra region, providing services for national or international production companies (article 65.2).
  • Taxpayers domiciled in Navarra for tax purposes who finance Spanish audiovisual productions (article 65. b)

65.1

  • Scope of application: Investments in Spanish cinema film productions and other fiction, animation and/or documentary audiovisuals.
  • General percentage tax deduction: 35% of deductible expenses.
  • Special percentage tax deduction: 40% of deductible expenses (on the first million in the deductible base).

In the following cases:

    • 1. Productions where the only original version is in Basque.
    • 2. Productions directed by women only.
    • 2. Documentary productions.
    • 4. Animated productions.
    • 5. Productions directed by a person who has not directed or co-directed any cinema feature film or audiovisual series, whether fiction, animation or documentary.
  • Deductible expenses base: Cost of production, as well as the cost of copies, advertising, promotion and the special auditing report, with certain specialities and limits.
  • Requirements: +40% of the deductible expenses base spent on Navarrese territory to get the maximum deduction. If the percentage spent is lower, the deductible expenses base will be calculated by dividing the spending on Navarrese territory by 0.4.

65.2

  • Scope of application: Services for cinema film productions and/or Spanish or international audiovisual work with a certificate for work of a cultural nature.
  • Percentage tax deduction: 35% of deductible expenses.
  • Deductible expenses base: Cost of production, cost of copies, advertising, promotion and the special auditing report, spent on Navarrese territory.
  • Requirements: Minimum shooting period of one week in Navarra. The base for the deduction cannot exceed 80% of the production costs.

65.bis

  • Scope of application: Taxpayers helping to finance Spanish cinema film and productions and other fiction, animation and/or documentary audiovisuals, made by other taxpayers who meet the requirements for entitlement to a deduction as stipulated in article 65.1.
  • Tax deduction: The taxpayer taking part in the financing will be entitled to accredit the deduction provided for the production company in article 65.1, up to a maximum (the result of multiplying the sum of the amounts disbursed by 1.25). The excess may not be applied by the production company.
  • Requirements:
    • The taxpayer cannot be linked to the production company.
    • Signature of a financing contract between the production company and the taxpayer taking part in financing the production, before the end of the tax period in which the deduction is generated.
    • Taxpayers cannot acquire intellectual property or other rights to the results of the production.

In any case the deduction may not exceed 5,000,000 and the sum of the deduction plus other assistance may not exceed 50% of the production cost. This limit will be raised in the following cases:

  • 85% for short films.
  • 80% for productions directed by a person who has not directed or co-directed more than two feature-length films certified for commercial showing in cinemas, with a production budget of not more than 1,500,000 euros.
  • 80% for productions filmed entirely in Basque.
  • 80% for productions directed solely by people with a degree of disability of 33% or more, as recognised by the competent body.
  • 75% for productions directed by women only.
  • 75% for productions of special cultural and artistic value that need exceptional financial support according to the criteria established by provincial order or in the pertinent calls for applications for assistance.
  • 75% for documentaries.
  • 75% for animated works whose production budget does not exceed 2,500,000 euros.
  • 60% for certain cross-border productions.
  • 60% for international productions with Latin American countries.

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