Why Spain’s Canary Islands are the new El Dorado of film shoots

A 38-percent tax break for filmmakers has attracted movies such as Ridley Scott’s ‘Exodus’

The set for Wrath of Titans in Teide National Park, in the Canary Islands
The set for Wrath of Titans in Teide National Park, in the Canary Islandsdelia padrón (la opinión de tenerife)

The call from Volcano Films caught Marina Entero by surprise. The production company was getting in touch with this 40-year-old native of the Canary Islands to offer her a job as a driver in Exodus, the big-budget movie shot by Ridley Scott in late 2013 on the island of Fuerteventura and in the Andalusian province of Almería.

Ridley Scott was delighted about his decision to choose Fuerteventura as the set for his movie. The shoot was originally going to take place in Marseille, but the final choice allowed the producers to save €15.8 million by claiming the 38-percent tax break offered on the islands — much higher than the 18 percent they would have been allowed to claim in mainland Spain.

Over the last decade, Spain has lost 80 percent of potential film shoots due to the lack of an attractive tax regime similar to that of other European countries, according to the Association of Broadcast Production Professionals (APPA) and the Federation of Associations of Broadcast Producers of Spain (FAPAE).

A leading example of this is the successful series Game of Thrones, whose producers initially considered Spain for the first season. Ultimately, Malta and Ireland won out.

Companies are afraid because it’s a complex system” Jaime Sanz, Ernst&Young

Recently, HBO showed renewed interest in Spain, more particularly in Andalusia, for the upcoming shooting of season five. The final decision will be taken this month, but the Andalusia Film Commission is warning that a problem is being caused by the lack of attractive tax incentives. In France, exemptions can reach up to 30 percent. In Ireland it is 28 percent. But nobody beats Brazil, whose government offers breaks of up to 100 percent to film producers who shoot there.

“I cannot see any good reason, not even the crisis, for the government not to invest in this. A film shoot is a very significant source of revenue,” says Carlos Rosado, president of the Spain Film Commission. “For every euro spent on tax incentives, there is a direct impact of between €4 and €6. Money is being lost by the bucketful.”

After meeting with members of this commission, the Finance Ministry said it would consider tax incentives of 30 percent for film productions. A mixed commission made up of all the relevant ministries and film groups has been meeting for two years to negotiate a new model for film financing.

Although it is too early to calculate the specific benefits of seeing Game of Thrones shot in Andalusia, the president of the Spain Film Commission says that the region would pocket nearly €100 million in profits and that the project would create around 900 permanent jobs and 5,000 temporary ones.

Adrián Guerra, a producer from the Canary Islands, notes that in the last 20 years “nothing has been done” by regional authorities, but that ever since the higher tax breaks were approved in 2009, several big-budget movies have been shot here. Besides Exodus, there was Wrath of the Titans (2011) and Fast & Furious 6 (2013), among others.

The Spain Film Commission has asked the finance minister to adopt the French model

For 2014, the Gran Canaria Film Commission has 13 new film and television projects either finished or in the pipeline, including one starring Penélope Cruz. This week, Demi Moore was in Gran Canaria for the filming of Wild Oats, co-starring Shirley MacLaine and Jessica Lange.

For their part, the Spain Film Commission has asked Finance Minister Cristóbal Montoro to adopt the French model.

“It is a simple method that returns 30 percent of taxes to producers who film there, on condition that they hire French companies and professionals, shoot for at least a week, and invest between €1 million and €20 million,” says Rosado.

The process in the Canary Islands is more complicated. The film producer has to find private investors and convince them to form an Agrupación de Interés Económico (AIE), a legal body that can claim the tax breaks.

Jaime Sanz, of the law firm Ernst & Young Abogados, has worked for the main production companies filming in the Canaries.

“Companies are afraid because it’s a complex system,” he explains. “They also have to worry about explaining to the investors about the benefits of these exemptions.”

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