With the recent legislation changes developed for work based in the Canary Islands, the tax deduction for expenses incurred in production of foreign feature-length films and audiovisual works as follows:
54% for the first €1 million
Of the tax credit base and 45% above that figure (previously, only a 40% flat-rate was applied, while in mainland Spain it is 30% for the first €1 million).
Pre & post production costs
The minimum amount of expenditure is €200,000 for pre-production and post-production costs for animation and visual effects made in Spain (the minimum expenditure amount in Spain remains as €1 million in other cases).
This deduction is currently capped at €5.4 million
However, we can expect that the maximum amount of deduction will likely be increased to €18 million in the short term.
The expenses that qualify for this tax deduction are the costs of creative personnel with residence in the EU (max €50,000 /person/year) and those arising from the use of technical industries and other suppliers.
The EU rules regarding subsidy intensity levels apply
In general, the intensity level allowed is 50% of the production budget. An individual analysis of the specific conditions, costs and location is required to avoid or minimize the impact of such intensity limitation on the subsidies.
On a case-by-case basis Orca Studios is capable of financing part of the VFX budget.