‘Game of Thrones’ may well have helped shed light on eligible expenses
MADRID –Spain gave “Games of Thrones” the location for its Water Gardens of Dorne in Seville’s Alcazar Palace. Now it may have helped Spain gain clarity on new and attractively broad-based tax credits for international shoots in general.
After near six months of uncertainty, on June 2, Spain’s tax authorities issued a broad list of clarifications to multiple questions lodged by the unidentified line producer of an equally indeterminate foreign TV series which, the authorities said, was set to shoot a substantial part of a season in Spain. These shed light on what local spend in Spain could qualify for new Article 36.2 tax credits on international shoots.
One day later, HBO confirmed it would shoot portions of “Games of Thrones’” Season 6 on natural locations in Girona, in North-East Spain’s Catalonia, a city with imposing battlements, towers and churches, and in Peñiscola, a castle-topped town which stood in for Valencia in Charlton Heston-starrer “El Cid.”
It has still to be seen if “Game of Thrones” will use Spain’s new tax credits, which were formerly introduced in Spain’s Nov. 27 Corporate Tax Law and operative from Jan. 1, but left producers with a litany of questions as to their practical application.
Already, however, Paulino Rivero, president of Spain’s Canary Islands, is claiming a “big $100 million production” from Hollywood will roll there thanks to the new tax credits. And the rest of Spain’s big shoot service sector is breathing a sigh of relief at its tax authorities’ clarifications, which take in most concepts on their wish list.
Broadly, all expenses accrued by a production in Spain are included in the credit, said producer Adrian Guerra (“Buried,” “Red Lights,” “The Gunman”). Applied to a production’s creative elements, if they are Spain or E.U. tax payers, eligible spend is capped at €50,000 ($55,575) per person.
The only thing the unspecified TV production asked for which it didn’t get was for legal, administrative and accounting expenses to be included in the incentive.
Also, the tax rebate can only be claimed in the fiscal year when a production finishes, and not spread over several years, Guerra added. It is unclear whether animation productions are included in the former limitation.
The tax authorities’ clarifications now set a precedent for other TV and movie shoots.
Mainland Spain’s tax credit cap per production is low: €2.5 million ($2.8 million), rising to €4.5 million ($5.0 million) and a 35% rate in the Canary Islands. But, introduced in 2009, France’s Tax Rebate on International Productions (TRIP) originally had a €4 million ceiling. It will be €30 million ($33.3 million) per production from next year.
“The new credit is a cash rebate and can be cash-flowed by banks. That’s very attractive. We now have to find the productions to make it work,” Guerra said.