A practical guide to understanding how Spain's audiovisual tax incentive is structured depending on the nature of the project, which regime may apply in each case, and which requirements need to be properly defined from the outset. The information set out below is based on official sources and cross-checked industry documentation.

In the audiovisual sector, the term tax rebate is often used as though it referred to a single mechanism. In Spain, however, the framework does not operate as a single, undifferentiated system. National legislation distinguishes between the deduction applicable to Spanish productions and the deduction linked to expenditure incurred in Spain in the execution of foreign productions. Against that background, international co-productions must be assessed according to their specific legal and administrative classification, as they do not function as a standalone category outside the system. As established by the Spanish Tax Agency, Article 36 of the Corporate Income Tax Act expressly separates these scenarios into different sections.

The general legal framework can be consulted here.

For that reason, before looking at rebate rates, it is essential to clarify something much more important: what type of project is actually being structured. That initial definition determines who may benefit from the deduction, the basis on which it is calculated, which certificates will be required, and the documentary framework that must be maintained throughout the production. Official guidance on the regime applicable to Spanish productions and to foreign productions carried out in Spain can be consulted through the Spanish Tax Agency.

What Does Tax Rebate or Audiovisual Tax Incentive Mean in Spain?

In industry terms, tax rebate is often used as an umbrella concept for the tax incentives available to audiovisual productions. From a technical perspective, however, Spain's framework requires a clear distinction between two main national regimes.

Article 36.1 of the Spanish Corporate Income Tax Act governs the deduction for investments in Spanish film productions and audiovisual series. Article 36.2, by contrast, governs the deduction linked to expenditure incurred in Spain in the execution of a foreign production. This is not simply a terminological distinction. It has direct implications for the beneficiary of the incentive, the basis on which the deduction is calculated, and the substantive and formal requirements that must be properly evidenced. The Spanish Tax Agency addresses this distinction expressly in its manuals and practical guidance.

The official source can be consulted here.

Domestic Productions: How the Spanish Regime Works

For Spanish productions, the incentive is structured on the basis of the total production cost, to which certain print, advertising and promotion expenses may also be added within the limits established by law. In addition, a significant portion of the deduction base must correspond to expenditure incurred in Spain. This is not an automatic deduction simply because a project is produced "from Spain", but a regime subject to clearly defined economic, territorial and documentation requirements.

As a general rule, the state deduction applicable under this regime is 30% on the first €1 million of the deduction base and 25% on the remaining amount, subject to the maximum limits established per production and, in the case of series, per episode.

This regime also involves essential formal requirements, including the Spanish nationality certificate and the cultural certificate, together with other obligations linked to the work and its administrative recognition. This is where precision becomes critical: the incentive does not rest on expenditure alone, but on the correct classification of the project within the applicable regulatory framework.

International Productions Carried Out in Spain

When a foreign production is filmed or executed wholly or partly in Spain, the incentive does not operate in the same way as it does for a domestic production. In these cases, the beneficiary is not simply the foreign production company by virtue of choosing Spain as a shooting location, but the producer registered with the ICAA's Administrative Register of Film and Audiovisual Companies that assumes responsibility for executing the production in Spain.

The deduction base is made up of eligible expenditure incurred in Spain and directly linked to the production, in particular costs relating to creative personnel, technical industries and local suppliers, within the limits established by law. Here too, the general rate is 30% on the first €1 million and 25% on the remaining eligible base, but subject to minimum spend requirements in Spain, minimum production cost thresholds and specific caps on both the eligible base and the maximum deductible amount.

The official explanation of this regime can be consulted through the Spanish Tax Agency.

This point is especially relevant for international production companies, studios, platforms and businesses considering Spain as an execution territory. The key is not simply to shoot in Spain, but to structure the local operation correctly, define which expenditure qualifies, and maintain robust documentary traceability from the outset.

International Co-Productions: Where They Really Fit

International co-productions are often the area where the greatest confusion arises. They should not be approached as though they were a separate, standalone "third rebate", because technically that is not how the Spanish system works. What matters is determining whether the project achieves the legal and administrative classification required to be recognised in Spain under the applicable regime.

In practice, an international co-production may fall within the logic of a Spanish production when it meets the relevant requirements and obtains the necessary approval and recognition. If, by contrast, the project is in substance a foreign production engaging production services in Spain, the usual classification will be that of the execution of a foreign production. The distinction may appear subtle, but it changes the entire route of the project: its structure, documentation, certification requirements and the way the incentive is applied.

The Ministry of Culture / ICAA publishes the official approval procedure for Spanish-foreign co-productions, which is the relevant framework for assessing whether a project meets the requirements to obtain Spanish nationality.

Enhanced Regional Tax Incentives in Spain: The Canary Islands, Navarre and the Basque Country

In addition to the general national regime set out in Article 36 of the Spanish Corporate Income Tax Act, certain territories in Spain offer enhanced tax incentives for audiovisual productions. In practice, the most significant are the Canary Islands, Navarre and the Basque Country, the latter operating under its own regulatory framework in each of its three historic territories: Álava, Bizkaia and Gipuzkoa. This is far from a minor detail: depending on where a project is structured and executed, the tax treatment can vary significantly.

The Canary Islands

The Canary Islands offer one of the most powerful incentive frameworks in Spain thanks to their specific tax regime. According to the Spanish Tax Agency, for audiovisual productions carried out in the Canary Islands, the deduction under both Article 36.1 and Article 36.2 increases to 54% on the first €1 million and 45% on the remaining amount. In addition, the maximum deduction rises to €36 million per production and, in the case of series, to €18 million per episode. For foreign productions, the Spanish Tax Agency also establishes a minimum spend threshold of €1 million in the Canary Islands, or €200,000 in animation or post-production services.

Navarre

Navarre has its own tax regime, which goes beyond the general national framework. According to official information published by the Government of Navarre, the incentive has been strengthened to 45% and may reach 50% on the first €3 million in the case of so-called "difficult works". In addition, the Navarre framework does more than simply establish the applicable rate: it sets out a formal system of prior reporting and subsequent validation, under which the Directorate-General for Culture determines the type of production, the deduction base and the percentage that applies.

Another key feature of the Navarre model is the territorial allocation of expenditure. When regulating the conditions of the incentive, the Government of Navarre made clear that part of the spend must be directed to Navarre itself, setting that requirement at 40% in order to consolidate local activity and employment. Navarre was also a pioneer in the use of financing agreements as a mechanism for structuring the participation of financiers in this type of incentive.

Navarre should therefore not be viewed simply as a region offering "a better percentage", but as a production ecosystem with its own tax framework, specific administrative validation and a clear territorial logic for expenditure allocation. That makes it a particularly relevant jurisdiction for certain feature films, series and financing structures.

Basque Country

In the case of the Basque Country, it is important to avoid a common oversimplification: there is no single, uniform Basque tax incentive. The framework depends on each foral territory and must therefore be assessed separately in Álava, Bizkaia and Gipuzkoa. Even so, institutional sector documentation indicates that in Euskadi the incentive may reach up to 60%, with an additional 10% increase where the work is produced exclusively in Basque in its original version.

Álava

The Provincial Council of Álava expressly states that the deduction for investments and expenditure in audiovisual productions applies to both domestic and foreign productions. The rate reaches 60% where expenditure in the Basque Autonomous Community exceeds 50% of the total, and 50% where that expenditure falls between 35% and 50%. In both cases, the incentive may be increased by an additional 10 percentage points where the work is produced exclusively in Basque in its original version, bringing the maximum to 70%. The Provincial Council also makes clear that the deduction may be applied not only by the production company but, in certain cases, by the executive production company.

Álava is therefore one of the most aggressive tax territories in the Spanish market, but it requires a properly structured analysis of expenditure location, the beneficiary entity, and the cultural and copy-deposit requirements. This is not an incentive that can be explained in broad terms: it requires structure.

Bizkaia

Bizkaia has developed one of the most visible and competitive incentive models in Spain. According to the Provincial Council of Bizkaia and the Bilbao Bizkaia Film Commission, the deduction can range from 35% to 60% depending on the proportion of expenditure incurred in Bizkaia, with an additional 10% for works produced entirely in Basque, bringing the maximum to 70%. The published scale is clear: 60% where expenditure in Bizkaia exceeds 50%, 50% where it falls between 35% and 50%, 40% where it is between 20% and 35%, and 35% in all other cases.

Bizkaia has also strengthened the legal certainty of this regime and expressly extended it to domestic productions, international productions and new digital formats, always within its own foral regulations. The key point here is one that is often overlooked: to apply this incentive, it is not enough simply to shoot in Bizkaia; the taxpayer must also be subject to Bizkaia's tax rules, as set out in Instruction 3/2023 of the Provincial Treasury. That detail changes the entire strategy for structuring the project.

Bizkaia is not simply "a territory with a higher percentage". It is a foral tax regime with its own logic: exceptionally powerful, but one that requires the correct tax positioning of the producer or executive producer and a very careful analysis of the entity that actually generates the deduction.

Gipuzkoa

Gipuzkoa also operates under an enhanced regime. The San Sebastián-Gipuzkoa Film Commission states that the deduction is 50% of the base where investment and expenditure in the historic territories of the Basque Autonomous Community represent between 35% and 50% of the total, and 60% where they exceed 50%. The same source indicates that the rate may reach 70% where the work is produced exclusively in Basque in its original version. In addition, the current framework is based on Gipuzkoa Foral Regulation 2/2024.

In practical terms, Gipuzkoa belongs to the same category of enhanced incentives as the other Basque territories, but always within its own foral framework. As in Álava and Bizkaia, this is not a case for generic promises, but for a careful analysis of who is subject to tax, where expenditure is incurred and which production structure will underpin the incentive.