Audiovisual productions must be filmed entirely in a co-official language to apply the 80% deduction

Audiovisual production companies seeking to maximize the tax benefits of their projects must pay special attention to the language used during the filming phases. The application of the maximum deduction limit does not depend solely on the final version of the work, but on the linguistic reality of the production on set.

What the DGT has ruled

The query concerned whether it was sufficient for the first copy certified by the ICAA to have an original version in a regional language to access the 80% aid intensity limit, or whether it was necessary for the filming to be carried out entirely in said language. The Dirección General de Tributos (DGT) has determined that Article 36.1 c) of the Corporate Tax Law (Ley del Impuesto sobre Sociedades) requires productions to be filmed entirely in one of the co-official languages other than Spanish.

The criterion establishes that if the technical or artistic crew uses Spanish or foreign languages during filming, the production does not meet the requirement of linguistic integrity. In such cases, the entity must apply the general deduction limit, which is 50%, unless other specific legal scenarios apply.

What it means for you

For production entities, this criterion implies that the certification of the work by the ICAA is not a blank check for applying the most favorable deduction rate. Compliance with the requirement is operational in nature and must be reflected in the actual execution of the filming.

• If the filming includes dialogues or communications in Spanish or foreign languages, the intensity of the aid will be limited to 50%.
• The existence of an original version in a co-official language in the certified copy does not validate filming carried out in other languages.
• The 80% tax benefit is conditional upon the linguistic homogeneity of all stages of filming.

What should be done

It is necessary for production companies to coordinate their filming planning with the tax requirements of the Corporate Tax Law. It is advisable to consider implementing protocols that ensure the co-official language is the only one used during the recording process to guarantee access to the 80% limit. Each project must be analyzed to verify whether its production structure complies with the linguistic integrity requirement imposed by the regulations.