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V2364-23 31 August 2023 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · deducción por espectáculos

Copyright, technical and promotional costs may be included in live performance tax deduction

A theatre and musical production company has requested clarification on which expenses can be included in the tax deduction base under Article 36.3 of the Corporate Tax Act. The Directorate General for Taxes (DGT) clarifies which direct costs are admissible and which are considered structural expenses or unrelated to the deduction.

The question raised

Whether the expenses set forth in the consultation request may be considered direct expenses and, therefore, eligible to be included in the base for the deduction provided for in section 3 of Article 36 of Law 27/2014, of November 27, on Corporate Income Tax.

The DGT's ruling

The base for the deduction for the production and exhibition of live shows is composed of direct artistic, technical, and promotional costs, reduced by subsidies. These may include copyrights, sound equipment, assembly technicians, depreciation of assets used for the activity, technical staff payrolls, and advertising. Ticket sales commissions, rentals, cleaning, maintenance, utilities, insurance, taxes, or hall staff are not direct costs. Structural expenses and the rebilling of head office costs are not considered direct costs.

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