The DGT Clarifies the Scope of the Tax Credit for Financing Audiovisual Productions

The tax credit for financing audiovisual productions regulated in Article 39.7 of Ley 27/2014, del Impuesto sobre Sociedades (Corporate Income Tax Act, “LIS”), has become established as one of the usual channels for raising private funds in the Spanish audiovisual sector. Binding ruling V0905-26, of 24 April 2026, addresses its application to a feature-length documentary financed through a crowdfunding campaign and direct contributions from investors, and provides relevant clarifications both on the content of the incentive and on the limits of the tax ruling procedure itself.

The facts submitted for ruling

The applicant entity is engaged in the production, recording, marketing and distribution of audiovisual works and is producing a feature-length documentary of Spanish nationality, with an estimated production budget of between 82,000 and 100,000 euros and expenditure that will be incurred almost entirely in Spanish territory.

To complete the financing of the work, the production company plans to bring in financiers who would each contribute amounts of around 2,500 euros, with variations depending on the profile of each investor. The contribution would be channelled through a crowdfunding campaign or through a direct contribution and, in either case, would be formalised in a contract between the parties. The investment would not entail the acquisition of any rights over the ownership of the work, or of intellectual property rights or rights of any other kind.

On that basis, the applicant raised four questions: the deductibility of the amounts contributed by the financiers under Article 36.1 of the LIS, the treatment in Personal Income Tax (IRPF) and in Inheritance and Gift Tax (ISD) of the investors who are individuals, the formal requirements applicable to both parties, and the possible existence of other tax benefits associated with the project.

The subjective scope of the tax ruling

Before addressing the substance, the Directorate-General for Taxes (Dirección General de Tributos, DGT) introduces a procedural clarification that deserves separate attention. Invoking Article 88.1 of Ley 58/2003, General Tributaria (General Tax Act), under which taxpayers may submit enquiries regarding the tax regime, classification or characterisation that applies to them in each case, the DGT expressly limits its reply to the first and third questions, which are those relating to the applicant entity. The remaining questions are left unanswered because they concern the legal position of the potential investors, who have not submitted the enquiry.

The practical consequence is significant in financing transactions where the investor’s tax certainty is a determining factor in its decision. The administrative position obtained by the production company does not cover the individual position of each financier, who has no binding ruling of its own on its taxation. A tax ruling has a strictly subjective scope and is not transferable to third parties merely because they take part in the same transaction.

The reply also adds two express starting assumptions. The first is that the contract signed between the parties, whatever its type, will meet the requirements of Article 39.7 of the LIS. The second is that the requirements of Article 36.1 are met in respect of the documentary. Both are characterised as matters of fact which would have to be proven by any means of evidence admitted in law before the competent audit bodies.

The tax credit generated by the producer

Article 36.1 of the LIS grants investments in Spanish productions of feature-length and short films and of fiction, animation or documentary audiovisual series a tax credit of 30 per cent on the first million of the base and 25 per cent on the excess.

The base of the tax credit consists of the total production cost, together with the costs of obtaining copies and the advertising and promotion costs borne by the producer, subject to a combined limit for both items of 40 per cent of the production cost. At least 50 per cent of that base must correspond to expenditure incurred in Spanish territory, a point which presents no difficulty in the case analysed, and the amount of the tax credit may not exceed 20 million euros.

Its application requires obtaining the certificate of nationality and the certificate attesting the cultural character of the work, issued by the Instituto de la Cinematografía y de las Artes Audiovisuales (Institute of Cinematography and Audiovisual Arts) or by the competent regional body, certificates which are binding on the tax authorities irrespective of when they are issued, as well as delivering a new copy in perfect condition to the Filmoteca Española (Spanish Film Archive) or to the film archive officially recognised by the respective autonomous region.

As regards timing, the tax credit is generated in each tax period in respect of the production cost incurred in that period, although it is applied from the tax period in which production of the work is completed. The base is reduced by the amount of the subsidies received to finance the investments that give rise to the tax credit and, together with all other aid received, the incentive may not exceed 50 per cent of the production cost, a limit that rises to 75 per cent in the case of documentaries.

Passing the tax credit on to the financier

Article 39.7 of the LIS allows a taxpayer that participates in the financing of Spanish productions to apply the tax credits provided for in paragraphs 1 and 3 of Article 36, the amount being determined under the same conditions as would have applied to the producer and provided that they have been generated by the latter. The structural premise of the regime is that the financier contributes amounts intended to cover all or part of the production costs, as well as the costs of copies, advertising and promotion borne by the producer up to the limit of 30 per cent of the production costs, without acquiring intellectual property rights or rights of any other kind in the results, ownership of which must in all cases remain with the producer. This is precisely the scheme described in the ruling request.

The timing of the contribution is flexible. Amounts intended to finance production costs may be contributed at any stage, before or after the producer incurs them, and until the certificates of nationality and cultural character are obtained. Amounts intended for copies, advertising and promotion may likewise be paid in advance or deferred, but never beyond the tax period in which the producer incurs those costs.

The quantitative limit is the element that governs the whole transaction. The maximum amount of the tax credit generated by the producer that the financier may apply is the result of multiplying the amount contributed by 1.20. Applied to the case analysed, a contribution of 2,500 euros would give entitlement to a maximum tax credit of 3,000 euros, provided that the producer had actually generated a tax credit of that amount. The excess tax credit that is not passed on may be applied by the producer that generated the entitlement.

The regime is completed by a set of requirements on which its application depends:

• The signing of one or more financing contracts, which may be signed at any stage of the production, setting out the identity of the taxpayers participating in the production and in the financing, a description of the production, the budget with a detailed breakdown of costs and in particular those incurred in Spanish territory, and the form of financing with a separate specification of the amounts contributed by the producer, by the financier and by subsidies or other support measures.
• The submission of the financing contract and of the certification of compliance with the nationality and cultural character requirements in a notification to the tax authorities, signed by both the producer and the financier, before the end of the tax period in which the latter is entitled to apply the tax credit.
• The absence of any related-party link between producer and financier within the meaning of Article 18 of the LIS, the existence of which excludes application of the regime altogether.
• Compliance with the combined limit of 25 per cent of the reduced gross tax liability provided for in Article 39.1, which rises to 50 per cent where the Article 36 tax credit corresponding to the financier is equal to or greater than 25 per cent of that tax liability.

It should be stressed that the prior notification is not an ancillary formality but a requirement for applying the tax credit, and that its timing is set by reference to the financier’s tax period.

Crowdfunding as a channel and the contract as a requirement

The ruling request describes a fundraising exercise carried out through a crowdfunding campaign or through a direct contribution. The DGT attaches no consequence to the channel used and merely proceeds on the assumption that, whatever the type of contract signed by the parties, it will meet the requirements of Article 39.7 of the LIS.

A reasonable reading can be drawn from that wording: the fundraising route is irrelevant for the purposes of the incentive, whereas the contractual basis and the joint notification to the tax authorities are non-negotiable. A collective financing campaign carried out exclusively through a platform’s general terms and conditions does not in itself satisfy the minimum content required by the rule or the obligation of notification signed by both parties. The individualised legal documentation of each contribution is therefore the element on which the tax effectiveness of the transaction rests.

The producer’s position after the tax credit is passed on

The reply concludes that the applicant entity may apply only the excess of the Article 36.1 tax credit that it has generated and that is not passed on to the taxpayers participating in the financing under Article 39.7. The incentive is therefore fixed in amount and is divided between producer and financiers, so that bringing in the latter does not increase the total benefit associated with the work. This finding is essential for correctly sizing the financing transaction from the initial design stage.

Individual investors and the filter of Article 68.2.a) of the IRPF Act

Although the DGT declines to rule on the regime applicable to the investors, the reply sets out a criterion of undoubted practical relevance. Article 68.2.a) of Ley 35/2006 (Personal Income Tax Act, “LIRPF”) extends to IRPF taxpayers who carry on economic activities the incentives and stimuli for business investment established in Corporate Income Tax legislation, with the same percentages and deduction limits and with the exception of the provisions of paragraphs 2 and 3 of Article 39 of the LIS.

With an express reference to binding ruling V2535-23, of 21 September 2023, the DGT recalls that, insofar as the investor is an IRPF taxpayer carrying on economic activities, it may apply the provisions of Article 39.7 of the LIS under the conditions and requirements laid down in the applicable legislation. The decisive element is therefore the carrying on of economic activities.

The ruling does not address the situation of individuals who do not meet that condition, nor the questions raised in respect of Inheritance and Gift Tax, which were expressly excluded from the reply on grounds of standing.

Practical implications

Reading ruling V0905-26 as a whole, a number of points of attention can be identified when designing audiovisual financing structures.

• The characterisation of the incentive does not depend on the name given to the contract but on facts that can be evidenced before the audit bodies, in particular that the financier acquires no rights and that ownership of the work rests entirely with the producer.
• The sequence of certificates, contract and prior notification is strictly ordered and failure to comply with it jeopardises application of the incentive, regardless of whether the financial contribution has actually been made.
• Verifying the absence of a related-party link within the meaning of Article 18 of the LIS is particularly important in small-budget projects, where the financing often comes from circles close to the promoter.
• The 1.20 multiplier operates as a ceiling and not as a guarantee, since the tax credit applicable by the financier is in any event conditional on the amount actually generated by the producer and on the tax liability limits of Article 39.1.

In projects with moderate budgets, such as the one described in the ruling request, the relationship between the cost of the legal documentation and the amount of the incentive obtained should be assessed from the outset, together with the effect of the combined limit on aid applicable to documentaries.

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