Gran Canaria opens it´s doors to all kinds of investors to shoot movies and series.
that take place in the Canary Islands improve in efficiency and legal certainty in 2021. One of the main new features is that the tax deductions to which Canary Islands companies in the audiovisual sector are entitled will also be extended to the production companies from the rest of the national territory who come to shoot films, series or documentaries on the islands.
This option can significantly increase audiovisual activity in the Archipelago, due to the tax incentives broadening its spectrum to any national company that chooses the Canary Islands to shoot.
This is one of the most relevant aspects of the changes introduced in the 2021 General State Budget Law that will come into force tomorrow, after its publication in the BOE. The legal advisers of the audiovisual industry are waiting how the wording of the text will be that modifies articles 36 and 39 of Law 27/2014 on Corporation Tax, which refer to the tax credits that national and international cinematographic productions shot in Spain can benefit from.
Any improvement made to tax incentives for the audiovisual industry benefits the Canary Islands even more intensely because the Economic and Special Regime (REF) of the Islands allows it to increase deductions, which has meant that Canarian landscapes have become the backdrop of important international and national productions in recent years. The REF guarantees an increase of 20 percentage points in the amount of deductions for audiovisual productions and 80% of the limits with respect to the rest of the territory.
Another aspect that is modified with the beginning of the year 2021 refers to the size of the beneficiaries of the bonuses. Until now, the large investors who finance the productions were associated in an Economic Interest Group (AIE). With the changes introduced by the state budgets, this requirement is no longer essential for the audiovisual sector to obtain financing for a film or series, since it may also be through a contract directly between the producer and an investor who wants to finance the project and that, therefore, it will be able to avail itself of the tax incentive provided by law. The industry welcomes this possibility because it simplifies the processes to obtain financing for a production and paves the way in relations between the industry and investors. “It will no longer be necessary to participate using vehicles such as economic interest groups (EIGs), which are highly complex and expensive for independent initiatives, the ones most in need of this financing,” says the table that brings together the main producers in the country. It is also an attraction for medium-sized companies since not only large ones will be able to opt for the incentives offered by the law.
These measures join others that have been adopted in 2020 due to the situation generated by the pandemic crisis, with the cultural sector being one of the main affected by the paralysis of the activity. In May and November, two decree laws were approved in which, among other issues, more deductions are established in the case of feature film producers provided that at least 50% of the deduction base corresponds to expenses made in Spanish territory. Likewise, a general bonus is introduced that will be equivalent to 30% with respect to the first million base of the deduction and 25% on the excess of said amount.
At the expense of checking the text that is published on the 31st of December in the BOE, the audiovisual industry considers that a scenario of greater certainty, simplification and legal security is generated for operators because it will encourage the production of Spanish and Canary Islands films and series, with their fiscal singularities, you can benefit from an increase in shootings. These changes have come curiously from the hand of Esquerra Republicana in an amendment backed by PP, Ciudadanos and Vox and rejected in Congress by PSOE and Podemos.