Royal Decree Law 17/2020, of 5 May, approving support measures for the cultural sector and measures of a tax nature to deal with the economic and social impact of the COVID-2019, published in the BOE on 6 May and coming into force the following day, i.e. 7 May, has established various tax incentives in the field of culture, which are detailed below:
With effect from January 1, 2020, the deduction for investments in film productions regulated by Article 36 of Law 27/2014 on Corporate Tax (LIS) was amended to increase the percentages of the deduction, in addition to significantly relaxing its requirements. The rates of the tax credit, which were set at 25% for the first million euros of production cost and 20% for the excess, are now 30% and 25%, respectively. In addition, the production of short films is included in the activities eligible for this deduction.
According to the Explanation of Reasons for the Royal Decree-Law, the proposed modification will allow for an increase in the attraction of international productions and filming and the economic activity of the audiovisual sector in Spain, so that employment is generated and the subsequent increase in tax revenue occurs, as well as contributing positively to the promotion of Spain.
Furthermore, in order to increase citizen participation in the financing of sponsorship projects, Law 49/2002 of December 23 on the tax regime for non-profit organizations and tax incentives for sponsorship was also amended with effect from January 1, 2020, to increase by 5 percentage points the deduction percentages provided for donations made by Personal Income Tax (IRPF) payers to entities receiving sponsorship, an increase that is also applicable to Non-Resident Income Tax (IRNR) payers operating in Spanish territory without a permanent establishment.
Thus, the deduction for donations by individuals and non-residents without a permanent establishment is determined by the following scale
Deduction base Amount up to
Deduction percentage
150 euros.
80 (so far 75%)
Remaining basis of deduction.
35 (so far 30%)
If in the two immediately preceding tax periods donations, gifts or contributions with a right to deduct had been made to the same entity for an amount equal to or greater, in each case, than that of the previous year (a circumstance commonly referred to as “recurrence”), the percentage of deduction applicable to the basis of deduction in favour of the same entity exceeding 150 euros would be 40 per cent (until now it was 35 per cent).
Finally, in order to contribute to obtaining private financing to be used for the reactivation of the sector, Royal Decree-Law 17/2020 declares new events of exceptional public interest to the Berlanga Plan, the Alicante 2021 Programme, the event “Spain Guest of Honour at the Frankfurt Book Fair in 2021”, the Plan to Promote Street Opera at the Teatro Real and the event “175th Anniversary of the Construction of the Gran Teatre del Liceu”.
The terms of validity of other programmes considered to be events of exceptional public interest that had already been approved were also extended.
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