Madrid, June 28, 2017: The Official State Gazette published the 2017 Budget Act 3/2017 (hereinafter, the “3/2017 Act”). This new law introduces several revisions to tax-related issues. The following represents a summary of those changes considered most noteworthy. 

CORPORATE TAX

For tax periods beginning on or after 1 January 2017, the amendments introduce both new and revised tax breaks for performing televisual arts productions:

Tax breaks have been increased for cinematographic productions, audiovisual series and live broadcast shows of scenic and musical arts. The new rates on global incomes will be 25% on the first €1million and 20% on all amounts thereafter. Moreover, the 50% general limit is maintained, incorporating the 60% and 70% limits for certain productions; and In addition, tax breaks will also created for costs incurred by production companies carrying out the execution of foreign productions of feature films or audiovisual works on Spanish territories. Whereas the tax rate on such projects increases to 20%, the creative staff costs allowance is raised to €100.000. This is double the previously established limit. This is a significant contribution to the overall increase in new taxable allowance of €3 million.

VALUE ADDED TAX

Effective from 29 June 2017, the following amendments to tax exemptions on internal transfers  are enacted:

An exemption to VAT on the sale and/ or transfer of commemorative coins by the national mint, provided that the transfer value is not greater than their face value. Any amount accrued above the face value of the coin will be subject to VAT; and

The tax rate is reduced from 21% to 10%for specific deliveries of goods and provision of services categorized as the delivery of prescription spectacles or mixed hostelry services, such as shows, discotheques, banquet halls, barbecues or other analogous and cultural live broadcast shows.

TRANSFER TAX AND STAMP DUTY

Also effective from 29 June 2017, the Act creates a new tax rate on the transfer and/ or restoration of titles of nobility. The rate is updated to 1%. The taxable value of the act of transfer and/ or restoration is defined in accordance with the first paragraph of Section 43 of the consolidated text of transfer tax and stamp duty Act.

TAX ON HYDROCARBONS

With effect from 1 July 2016, the tax payable on the emission of every 1.000 litres of hydrocarbons from agriculture and ranching sources is raised from 68,71 to 78,71.

DELAY INTEREST AND LEGAL INTEREST RATE

Delay interest rate is fixed at 3,75% and legal interest rate at 3,00%.