Canary Islands – The audiovisual world is one of the strategic sectors for the diversification of the economy and the creation of more jobs requiring qualifications in the Canary Islands. Let us not forget that the islands have their own special tax regime, and one of the most powerful tax incentives in the whole of Europe: the Canary Islands Special Zone (ZEC).
A considerable ecosystem of audiovisual companies has been consolidated under the ZEC regime, where animation films and video games have great potential. However, within the value chain of the companies of this sector, many links can be carried out under this low taxation regime. Indeed, companies that are part of the ZEC have a 4% tax rate on their Corporate Tax, and these include businesses specialised in production, post-production and audiovisual distribution, videogames, animation films and cartoons, photography, edition, rendering and streaming and services provided to film production companies and others of this sector.
This ZEC tax tool is compatible with the rest of tax incentives, including deductions, according to Articles 35, 36.1 and 36.2 of the Spanish Law 27/2014 on November 27 regarding the Corporate Tax, with 40% deduction on foreign productions, 45%-40% deduction on investment in Spanish productions and co-productions, and 45% deduction on R+D+TI (Research+Development+Technological Innovation). What’s more, they have 0 IGIC (Canary Islands General Indirect Tax), according to the Order of May 23, 2017, which regulates the recognition of the application of zero rate type of the IGIC.