Spanish producers call for bigger tax breaks for international productions

During the last Cannes Film Market, the business counterpart to the Cannes Film Festival, there were plenty of countries boasting tax breaks for international movie projects. The magazine World of Locations published during the event, also carried a cover paid for by Malta, advertising its 40% tax incentive. Like the stalls at the Cannes Film Market, the publication boasts more about tax breaks than infrastructure or locations.

The United Kingdom, for example, offers a 25% tax incentive if an international film production uses its Pinewood Studios; Italy’s 30% rebate has multiplied the number of shoots in its restored Cinecittà Studios. And France not only offers a 30% tax incentive, any foreign project filming in the country will also have all its requirements coordinated by Film France. Among the pamphlets on display at the Film Market stalls, one shows the forests that can be filmed, while another has photos of the public buildings that can be used as locations.

If Spain had the same tax situation as our neighbors, we would be invincible

Film Commission president Carlos Rosado

Spain, in contrast, has no such pamphlets. The Spanish Film Commission’s stand is a muddle of stalls manned by a number of regions and sites all promoting locations with varying conditions. “The Spain Film Commission is merely a coordinating network without means or budget,” says a Spanish producer, who adds that Spain is bringing up the rear regarding tax incentives. In fact, as the Film Commission’s president Carlos Rosado explains, “[We are] in the lower end of the exemption bracket in Europe.”

Since 2017, an international film project can deduct 20% from its expenditure on Spanish territory, as long as a minimum of €1 million is spent. And there is a cap on the tax return of €3 million per project.

In the Canary Islands, the percentage rises to 40% and the return is capped at €5.4 million. In the northern regions of Navarre and Basque Country, the rules also vary. “The sector is aware that it is going to be difficult to raise the percentage,” says Rosado. “We are hoping for 30% , but the cap on the return could be increased €10 million.”

Despite the lack of economic incentives and the excessive red tape, Spain is still a prime location for international productions. Fernando Victoria de Lecea, a producer who has become an expert in the execution of international productions, producing shows such as Knight and Day, V3nganza and The Sisters Brothers, explains, “We have the best technical crews and varied landscapes within a few kilometers. But we are letting a massive business slip through our hands. I strongly believe that film is an industry and an international shoot not only brings income to the technical team, the film crew spends money – and a lot of it – in the area where they are filming. And not just on food and basics. During the shooting of The Sisters Brothers [the Jacques Audiard western that was filmed in Huesca, Navarre and Almeria] a Huesca car hire-company was used to provide 50 vehicles.”

An international film project can deduct 20% from its expenditure in Spain, as long as a minimum of €1 million is spent

The producer understands that a film shoot can disrupt normal activity in any given location, which is why a fee needs to be paid to use it. “But in exchange, I expect the local authorities to play their part too,” he says.

Victoria de Lecea is a founding member of the Association of Audiovisual Production Professionals (APPA) and also Profilm (the association of Spanish companies that provide services to international productions). Both associations are promoting meet-ups between various authorities in an effort to strip back the bureaucracy and improve the conditions for international projects.

“Spain needs to become even more attractive,” says Victoria de Lecea, who insists that with a legislative decree, which sidesteps a complicated legislative process, the Spanish Cabinet could raise the cap on the tax return to €10 million. The film industry is now waiting to see whether the new government of Socialist (PSOE) leader Pedro Sánchez will take this step.

It is hard to establish the number of international projects filmed in Spain and the amount of money invested as, according to Rosado, the Treasury has no available data.

While everything related to cinema in France depends on the National Center for Cinema and Animated Image (CNC), which has a €600 million budget to play with, the regulation of Spain’s sector is divided between the ICAA (the institute responsible for cinema in the Ministry of Culture), the Treasury’s tax relief, and the regulations and licenses issued by the central government, as well as the regions and the local councils. There is no central office that coordinates or at least facilitates the process.

A cry for centralized policy

Work conditions also vary depending on the region: the licenses for film shoots involving minors are dealt in some areas online and are given the go-ahead within the space of a day while, in other regions, they are done on paper and take 30 days to be processed.

The film crew spends money – and a lot of it – in the area where they are filming Producer Fernando Victoria de Lecea

“In France, they ask the international producers for the film’s intellectual property rights, to share images from the film shoot and even the ‘making of’ to promote shoots in the country,” says Victoria de Lecea. “Here, as there is no coordinated procedure – not even when it comes to getting a provisional international production license which would help get credit – we can’t use these images for publicity purposes in Spain,” says

As both Victoria de Lecea and Rosado point out, policy regarding culture should be established by the state and not be subject to the vagaries of politicians and their need to win votes.

In France, between 2009 and 2013, 72 projects, which received tax breaks, invested €365 million in the country and created 11,500 jobs. “If Spain had the same tax situation as our neighbors, we would be invincible,” says Rosado.

English version by Heather Galloway.