Spain now has one of the most attractive incentives for international film productions in all of Europe
On May 5, the Council of Ministers approved a comprehensive package of new audiovisual financial assistance measures to address the COVID-19 crisis. The measures include a 5% increase in the deduction allowed for companies providing services to international productions; more importantly, the tax rebate on costs incurred while in Spain has gone up from three to ten million euros.
This tax incentive—to which foreign productions of feature films, TV series, animated films and documentaries will have access—is now at 30% for the first million euros invested in Spain and 25% for all other expenditures.
The tax incentive for film production in the Canary Islands has become one of the most attractive in Europe, reaching 50% for the first million euros and 45% for all other eligible expenditures incurred in Spain. An ad hoc regulation raising the tax rebate amount to eighteen million euros is currently pending approval.
Great joy and relief
The international production services sector has welcomed these measures with great joy and a clear sense of relief, as it is something they have been requesting for many years.
The previous tax incentives could not compete with those offered in other European territories when it came to attracting major international productions.
"Only great locations and exceptional technical teams in the country were able to attract these types of projects which, unfortunately, for financial reasons, could only shoot a small part of the production," explains Adrián Guerra, founder of Nostromo Pictures and president of Profilm, an association that brings together Spanish companies and international productions.
He added, "Moreover, with the health crisis caused by COVID-19, the measure has meant that some companies have decided not to close knowing that they’d have new projects within a few months."
With the new incentives, international producers will be able to invest around forty million and receive the maximum rebate of ten million, an allowance that will undoubtedly generate more work for longer, rather than smaller levels of involvement in major projects as has been the norm.
“After the tax incentive reform, Spain has become a highly competitive and profitable shooting destination for the international industry, including North America," says Carlos Rosado, president of the Spain Film Commission.
"We're already signing contracts with international production companies that have been attracted by the improved incentives," says Peter Welter, CEO of Fresco Film Services, the company which has provided services in Spain for major productions, such as Game of Thrones.
Filming in the Canary Islands has special conditions that must be met in order to benefit from these tax incentives, as it meets the conditions for islands and remote regions stipulated by the European Commission.
In recent years, the Canary Islands have accommodated several major international projects attracted by the tax incentive, such as Jason Bourne, Solo: A Star Wars Story, Wonder Woman 1984, The Eternals and Rambo V: Last Blood.
"The improved incentives, along with other important factors like a variety of locations, our climate, and our professionals, we understand that that translates to more film productions shooting on the Islands," says Natacha Mora, coordinator of Canary Islands Film.