Shooting a foreign production in Spain: the tax rebate and its payout

The case, in five lines

What is brought

Before the shoot, the firm reviews the budget, drafts the production services agreement and, where there is doubt, requests a binding ruling from the Dirección General de Tributos (DGT, the directorate general that issues binding tax rulings); it then applies to the ICAA for the cultural certificate, files modelo 200 with the deduction and the payout request, and defends the payout in the tax review, in an appeal for reconsideration (recurso de reposición) or before the TEAR or the TEAC (the regional and central tax tribunals), and in the courts.

Before which court

The ICAA, or the competent regional body, for the cultural certificate; the Dirección General de Tributos for the binding ruling; the Agencia Tributaria for the payout and its review; the TEAR (Tribunal Económico-Administrativo Regional, the regional tax tribunal) or directly the TEAC (Tribunal Económico-Administrativo Central, the central tax tribunal) if the amount exceeds 150,000 euros (1,800,000 if bases or valuations are disputed) or if the act comes from a central body, and the TEAC on appeal against a TEAR decision given at first instance; in court, the Audiencia Nacional (Spain's National High Court) against a TEAC decision and the Tribunal Superior de Justicia (the regional High Court) against a TEAR decision that ends the administrative route.

Deadline

Modelo 200 within the 25 calendar days following the six months after the end of the tax period (article 124.1 LIS), with the payout requested in it. The ICAA decides on the certificate within one month (two for applications received between 1 October 2026 and 31 December 2026), and silence means approval. Against the assessment, one month from the day after notification (articles 223.1 and 235.1 LGT, the General Tax Act); judicial review, two months. The deduction can be reviewed for ten years (article 39.6 LIS).

Who can bring it

The Spanish production company registered with the ICAA that carries out the production: it owns the deduction and the payout, and it is the party in the proceedings before the tax authorities. The foreign studio or platform does not own the deduction and does not claim it: its right to that money arises from the production services agreement.

Financial risk

If you lose, you repay what was overpaid with late payment interest and, if the tax authorities find fault, a penalty; the part not paid out is lost. The payout can be delayed without generating interest (article 39.3 LIS), and if the contract obliges you to pay the studio before you are paid or does not allocate the cut, the production company funds the wait and bears the loss. Suspending collection of an assessment under challenge requires security.

The tax rebate belongs to the Spanish company: the studio is paid under contract

Article 36.2 LIS gives the deduction to producers registered in the ICAA's Registro Administrativo de Empresas Cinematográficas y Audiovisuales (the register of film and audiovisual companies) that carry out a foreign production, and only for expenses incurred in Spain. It is the Spanish service company that generates it, applies it in its Impuesto sobre Sociedades (corporate income tax) and, if its tax due falls short, collects it. The foreign studio or platform does not claim it and is not a party to the proceedings. The Dirección General de Tributos (DGT, the directorate general that issues binding tax rulings) has applied it in this way to a registered company hired for the executive production of a work classed as foreign (V0855-22).

Registration is not a separate step: the ICAA registers a company established in Spain of its own motion when it first applies for a certificate, and if it was not registered it provides its tax number, its deed of incorporation, its powers of attorney and its tax census registration (articles 30.1.a and 31.1 of Royal Decree 1084/2015). What does need watching is that nobody else uses the same spend: one and the same investment cannot give rise to a deduction in two entities (article 39.4 LIS), so the spend behind the tax rebate cannot also support the deduction for a Spanish production under article 36.1 in another company. If the company is running its own production at the same time, the budgets are kept apart from day one.

What nobody tells the studio is that the law does not govern the split. How much reaches it, when and who bears a cut is decided by the production services agreement: a net price with the incentive already deducted, payment when the production company receives the payout, protections if the certificate does not arrive or the tax authorities cut the base, and a right to audit the costs. An agreement that obliges the production company to pay on a fixed date, whether or not it has been paid, turns the studio's tax risk into the production company's debt. That is why the firm reviews that agreement before the shoot, on behalf of whichever party engages us.

Which spend counts: where the service is provided and where the creative staff reside

The base is made up of two kinds of spend incurred in Spain and directly related to the production: creative staff who are tax resident in Spain or in a European Economic Area state, and the use of technical industries and other suppliers (article 36.2 LIS). Creative staff are those defined in article 4.j) of Ley 55/2007 del Cine (the Film Act): director, screenwriter, director of photography, composer, actors and other performers, chief editor, art director, head of sound, costume designer and head of make-up and hair. Since Ley 38/2022 there is no longer a cap of 100,000 euros per person.

Residence is the first point of conflict. The United Kingdom and the United States are not part of the European Economic Area, so the fees of an actor who is tax resident in London or Los Angeles do not count as creative staff spend even if the actor shoots in Madrid; residence is proved with each person's tax residence certificate. Those non-resident performers are also taxed under the Impuesto sobre la Renta de no Residentes (non-resident income tax) at 24 per cent, or 19 per cent if they reside in the EU or the EEA with an effective exchange of information, subject to the applicable tax treaty (article 25.1.a of the consolidated text of that tax), and the production company that pays them withholds the tax.

The second is the place where the service is provided. For the DGT, spend is incurred in Spain regardless of the supplier's nationality, and if a service is provided only partly here, only that part counts (V2892-15, issued for article 36.1 and useful for 36.2): a visual effects invoice issued in Spain for work done in another country does not count in full. The third is transactions with related persons or entities, which are valued at market value (article 18 LIS): equipment rented from a company owned by the same shareholders above market price is adjusted and the base falls. Whether the production company's own margin forms part of the base is a question best settled before the budget is drawn up.

The figures: rates, minimums, caps and article 45 of the Regulations

The deduction is 30 per cent of the first million of base and 25 per cent of the excess, provided that Spanish spend reaches 1 million euros (200,000 for animation). The cap is 20 million per production for tax periods beginning on or after 1 January 2023 and, for series, the deduction is calculated per episode, with a cap of 10 million per episode. And there is a ceiling that gets forgotten: the deduction plus the other aid received by the production company cannot exceed 50 per cent of the production cost. Public aid for the shoot, wherever it comes from, is added in for that limit.

Visual effects have their own sub-paragraph: if the production company carries out visual effects services and Spanish spend is below 1 million, the deduction is 30 per cent of the base, without a cultural certificate, but subject to the de minimis aid cap, which the agency now applies under Regulation (EU) 2023/2831: 300,000 euros per undertaking over three years. And the Corporate Income Tax Regulations still contain, in article 45 and without having been repealed, a minimum production cost of 2 million and a maximum base of 80 per cent of total cost, which does not sit easily with the Act. Before budgeting a small or animated production, that clash is examined.

If the shoot or the post-production takes place in the Canary Islands, the rates rise to 54 per cent of the first million and 45 per cent of the excess (54 per cent for visual effects below 1 million), with caps of 36 million per production and 18 million per episode, and animation needs more than 200,000 euros of spend there. A tax domicile or a permanent establishment in the islands is required, and the 54 per cent only applies if aid intensity does not exceed 50 per cent (article 54 of Regulation (EU) 651/2014). The case "Filming in the Canary Islands: the 54% deduction and what the Spanish tax agency checks" covers it in detail.

The ICAA cultural certificate and the credits: without them there is no deduction

Except for visual effects below 1 million, the deduction requires a certificate from the ICAA, or from the competent regional body, confirming the cultural character of the production by its content or its link with Spanish or European cultural reality. It is applied for through the Ministry of Culture's electronic office with a description of the work, the technical and artistic data sheet and the sheet of shooting days, dates and locations (or the schedule and locations of the animation, visual effects or post-production). Since 18 September 2025 it also includes a sworn statement that the work has not been produced wholly and exclusively with generative AI and another on the accuracy of the documents (Order CLT/641/2025).

For live action, the scoring scale requires at least 15 points out of 35, across cultural content, work done in Spain and Spanish or European Economic Area staff; for series, the certificate is issued per season, stating the number of episodes. The ICAA decides within one month and, if it gives no notice, the certificate is deemed granted; for applications received between 1 October 2026 and 31 December 2026 it extended that period by one month. Its decision ends the administrative route: a refusal can be challenged by an optional appeal for reconsideration within one month or in court within two months. And it can revoke the certificate later if the criteria were not met.

Two further requirements get lost in post-production: the end credits must state that the production benefited from the incentive, the involvement of the authorities or film commissions that took part and the shooting locations in Spain, and the rights holders must authorise use of the title and the press material for cultural or tourism promotion. Only commissioning agreements signed before 11 July 2021 are exempt. As those rights belong to the studio, the authorisation is agreed in the services agreement; if the studio changes the credits in the final cut, the deduction is exposed.

Getting paid: the payout through modelo 200, with no discount and no interest

The tax rebate falls outside the overall limit of 25 or 50 per cent of tax due in article 39.1 LIS and does not count towards it. And if the tax due is not enough, article 39.3 allows the payout to be requested in the corporate income tax return itself: in modelo 200, box 00090 "Opción art. 39.3 LIS" on page 1 is ticked and the amount goes in box 01892 (and also in box 01042 if the company is taxed only by the State); for the Canary Islands, in box 01319 (and in box 01893 if it is taxed only by the State). Modelo 200 is filed within the 25 calendar days following the six months after the end of the period (article 124.1 LIS): with a calendar financial year, by 25 July.

Unlike the R&D&I payout in article 39.2, this one carries no 20 per cent discount and does not require waiting a year from when the deduction was generated. Nor is it blocked by the minimum tax in article 30 bis: the production company applies the deduction as far as it goes and requests the payout for the rest (V0309-23). In large groups subject to the complementary tax (the Pillar Two global minimum tax), it is also worth checking how the payout fits, because Ley 7/2024 treats as a qualified refundable tax credit one that is paid in cash within four years.

What nobody tells you is the timetable of the money. The payout is governed by article 31 LGT, but article 39.3 LIS expressly excludes late payment interest: if the agency takes more than six months to pay, it owes nothing for the delay. And before paying it can verify and review the return and issue an assessment (article 120.2 LGT). With a financial year ending in December, the money does not arrive before the summer of the following year, and sometimes well after. If the agreement with the studio has not provided for who funds that wait, the production company pays for it.

The tax agency cuts or refuses the payout: deadlines, bodies and evidence

The cut usually comes in a review before payment or in an inspection afterwards, which lasts 18 months, or 27 if turnover makes an audit compulsory (article 150 LGT). Deductions can be reviewed for ten years from the end of the filing period for the tax period in which they were generated (article 39.6 LIS and article 66 bis.2 LGT), although the correction only takes effect in periods that are not time-barred, which is four years (article 66 LGT). Submissions on the proposal are made within 10 to 15 days: that is the time to produce all the evidence, item by item. The case "A Spanish tax inspection has been opened against you" explains how a full inspection is handled.

An assessment that refuses or cuts the payout can be challenged by an optional appeal for reconsideration (recurso de reposición) or an economic-administrative claim (reclamación económico-administrativa), both within one month from the day after notification, and not both at once (articles 222, 223.1 and 235.1 LGT). The claim goes to the TEAR (Tribunal Económico-Administrativo Regional, the regional tax tribunal) or directly to the TEAC (Tribunal Económico-Administrativo Central, the central tax tribunal) if the amount exceeds 150,000 euros (1,800,000 if bases or valuations are disputed) or if the act comes from a central body; the tribunal has one year to decide. If the TEAR is chosen for an amount of that size, as here, it decides at first instance and its decision is appealed to the TEAC (recurso de alzada ordinario) within one month (article 241.1 LGT). After that, two months for judicial review: before the Audiencia Nacional (Spain's National High Court) against the TEAC and before the Tribunal Superior de Justicia (the regional High Court) against a TEAR decision that ends the administrative route. The prior attempt at negotiation under Organic Law 1/2025 is not required on this route.

If the agency has already paid and reassesses, it will claim back the overpayment with late payment interest; suspending that debt while it is challenged requires security (a deposit, a bank guarantee or surety insurance), unless security is waived for damage that would be difficult or impossible to repair. Any penalty is challenged separately, is suspended without security and does not apply if the company acted with due care, for example on a reasonable interpretation of the law (article 179.2.d LGT), as the case "Penalised for a mistake: annulling the penalty for lack of fault" explains. If the amount in dispute exceeds 120,000 euros per period and the tax authorities see more than a difference of interpretation, see "Your tax file becomes a criminal case: what is at stake".

How we run the case, step by step

1. 1

   Reviewing the budget before signing

   The Spanish spend is broken down item by item, the tax residence of each member of the creative staff is checked, related suppliers and work to be done abroad are identified, and the deduction is calculated with its limits: the 1 million minimum, the caps per production and per episode, the 50 per cent intensity limit and article 45 of the Regulations.

2. 2

   Drafting the services agreement and, where in doubt, requesting a ruling

   The agreement sets how and when the incentive reaches the studio, who bears a cut, the authorisation for the title and the credits, and access to the accounts. If an item is doubtful, the firm requests a binding ruling from the DGT before the filing period for the affected return ends; the DGT has six months to reply and its answer binds the tax authorities in dealings with the applicant (articles 88 and 89 LGT).

3. 3

   Applying to the ICAA for the cultural certificate

   Acting for the production company, the firm files through the Ministry of Culture's electronic office the description of the work, the technical and artistic data sheet, the sheet of shooting days, dates and locations and the sworn statements, and monitors the one-month period (two for applications in the last quarter of 2026) and approval by silence.

4. 4

   Filing modelo 200 with the deduction and the payout

   As a colaborador social (an authorised filing agent) of the Agencia Tributaria, the firm's registered lawyer files the return on behalf of the production company, without asking for its digital certificate or its Cl@ve login, with box 00090 ticked and the payout amount entered, within the 25 calendar days following the six months after the end of the period.

5. 5

   Handling the review with the evidence in order

   Requests are answered with the invoices, proof of where each service was provided, the residence certificates and the cost report, and submissions are made against the proposal within its 10 to 15 day period, without accepting arguable facts.

6. 6

   Challenging the assessment and applying the agreement with the studio

   The challenge is lodged within one month by an appeal for reconsideration or before the TEAR or the TEAC, with suspension if payment is required; if the TEAR decides at first instance, an appeal to the TEAC follows within a further month, and against the decision that ends the administrative route the case goes to court within two months if needed. At the same time the agreement is applied: what the studio is paid while the challenge lasts and what it returns if the cut is upheld.

The law that applies

• Art. 36.2 LIS. Gives the company registered with the ICAA that carries out a foreign production a deduction of 30 per cent of the first million and 25 per cent of the excess on its Spanish spend on creative staff resident in Spain or the EEA and on technical industries and suppliers, with a minimum spend of 1 million (200,000 for animation), caps of 20 million per production and 10 per episode, a 50 per cent limit together with other aid, a separate sub-paragraph for visual effects and the requirements of the cultural certificate, the credits and the authorisation of use. BOE-A-2014-12328
• Art. 39 LIS. Sets the overall limit on tax due, from which article 36.2 excludes its own deduction; allows its payout to be requested in the return when tax due is insufficient, governed by article 31 LGT and without late payment interest; prevents the same investment from giving rise to a deduction in more than one entity; and allows deductions to be reviewed for ten years. BOE-A-2014-12328
• Art. 18 LIS. Requires transactions between related persons or entities to be valued at market value and the supporting documentation to be kept available to the tax authorities. BOE-A-2014-12328
• Art. 45 RIS. Retains, without having been repealed, for the article 36.2 LIS deduction a minimum production cost of 2 million euros and a maximum base of 80 per cent of the total production cost. BOE-A-2015-7771
• Arts. 31 y 120 LGT. Govern refunds arising under the rules of each tax, with late payment interest if, once the period for each tax and in any event six months have passed, payment has not been ordered for reasons attributable to the authorities (article 39.3 LIS excludes it for this payout), and allow the authorities to verify and review self-assessed returns and issue the appropriate assessment. BOE-A-2003-23186
• Arts. 88 y 89 LGT. Allow written tax enquiries to be made before the filing period ends, with a reply from the DGT within six months that binds the authorities as regards the applicant while the facts, the law and the case law remain unchanged. BOE-A-2003-23186
• Arts. 222, 223 y 235 LGT. Allow one month from the day after notification for the optional appeal for reconsideration or the economic-administrative claim, and if the appeal for reconsideration is lodged, the claim cannot be brought until it is decided or deemed dismissed. BOE-A-2003-23186
• Arts. 4.j) y 7 Ley 55/2007. Define the creative staff of a work (authors, actors and other performers, and creative technical staff) and govern the register of film and audiovisual companies kept by the ICAA. BOE-A-2007-22439

Each article checked against the consolidated text published in the BOE (the Spanish official gazette).

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