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V2402-14 11 September 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · deducción por producciones cinematográficas

Copy, advertising and promotion costs included in audiovisual production deduction as expenses are incurred

An Association of Economic Interest enquires whether copying, advertising and promotion costs for audiovisual productions can be included in the tax base for corporate income tax. The DGT responds that such expenses generate a deduction as they are incurred and must be allocated to partners holding economic rights at the end of the period.

The question raised

1. Whether the entity may include in the deduction base of Article 38.2 of the TRLIS, according to the wording provided by Law 16/2013, the expenses for obtaining copies, advertising, and promotion incurred throughout the 2014 fiscal year. If so, what would be the correct method for including said expenses?

The DGT's ruling

Expenses for obtaining copies, advertising, and promotion borne by the producer form part of the deduction base under Article 38.2 of the TRLIS. These expenses are integrated into the deduction base as they accrue, subject to a limit of 40% of the production cost. In the case of economic interest groupings, the deduction base shall be imputed to the partners holding the economic rights at the close of the tax period.

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