Tax Exemption

Navarra has its own tax system and legislative framework, which means that it can offer better tax incentives than the rest of Spain. Deductions for investment in film production are regulated in article 70 of Regional Law 24/1996 (30 December) on Corporate Tax.

The main tax breaks in Navarra are:

35% for investments in film projects and shoots, higher than in the rest of the country.

The deduction does not require a minimum level of expenditure and is applicable to expenditure made directly in Navarra.

The investor can deduct 100% of the total sum invested, apart from the 25% limit on the tax rate for other kinds of deductions available in Navarra.

The period of application for these deductions is up to 15 years.

There are two kinds of scenarios that are incompatible, meaning that only one can be selected.

More information:
http://investinnavarra.com/en/news/tax-credits-for-film-and-audiovisual-productions-in-navarra/
http://navarrafilm.com/

Regional Law 24/1996 - Deduction rate: 35%

Supuestos de aplicación de deducción Base de deducción Requisitos / Características Aplicación de la deducción
Deductions for investments in Spanish feature films and fictional series, cartoons or documentaries that enable the creation of a physical medium prior to series production. The basis for the deduction will consist of the total cost of the production and the cost of obtaining copies and advertising/promotional expenses related to the product, up to a limit (for both) of 50% of the production cost.

Se minorará en el importe de las subvenciones recibidas para financiar las inversiones que generan derecho a deducción.
A requirement is that at least 25% of the deductible base should correspond to expenses incurred in Navarra.

In the case of a coproduction, the sums indicated in this section will be determined (for each co-producer) on the basis of its participation percentage in the project.

The deduction envisaged in this article will be applied from the tax year in which the film project is completed. Nevertheless, when the production lasts longer than 12 months and affects more than one tax year, the company may opt to apply the deduction when payments are made, applying the deduction system in force at the date on which it begins.
No resulta de aplicación el límite de cuota del 25%.

Plazo de aplicación por insuficiencia de cuota: 15 años (en caso de entidades de nueva creación, el cómputo de dicho periodo se inicia desde el primer ejercicio en que se produzcan resultados positivos).

Excepción sobre tributación mínima.
Deductions for implementation by producers entered in the Register of Film Companies of the Ministry of Education, Culture and Sports, related to a feature film production or audiovisual works that enable the creation of a physical medium prior to its series production. The tax credit will consist of the following expenses made in Navarra that are directly related to the production:

1.º Creative personnel expenses, provided the person(s) are domiciled in Spain or another country of European Economic Area for tax purposes, with an upper limit of 50,000 euros per person.

2.º Expenses arising from the use of technical industries and other suppliers, transport services and board and lodging that are needed for the production.
For this deduction to be applicable, the production must involve a minimum of one week’s shooting of interior or exterior scenes in Navarra, unless – for duly justified reasons – the period is lower because the scene cannot be shot in Navarra.

La deducción establecida para este supuesto no será aplicable cuando el productor receptor de los servicios aplique la deducción de acuerdo con el apartado primero.
No resulta de aplicación el límite de cuota del 25%.

Plazo de aplicación por insuficiencia de cuota: 15 años (en caso de entidades de nueva creación, el cómputo de dicho periodo se inicia desde el primer ejercicio en que se produzcan resultados positivos).

Excepción sobre tributación mínima.