MADRID — Spain’s parliament has approved a new film law that will substantially hike tax breaks, boost aid for animation series, and introduce a new fund for Catalan, Basque and Galician-language movies.
But the law’s most important feature is what it leaves out: any change, for better or worse, to a TV quota for Spanish film financing, which obliges most Spanish TV operators to plough 5% of their annual income into local film funding.
This regulation sees Spain’s free-to-air broadcasters investing nearly as much coin in domestic movies as their counterparts in France.
The quota caused such a bitter spat this year between broadcasters and producers that, given the lack of industry consensus on the issue, the government wisely decided to simply leave any mention of the regulation out of the new law, maintaining the quota in its current form.
Spain’s newly hiked tax breaks contemplate an 18% tax deduction on monies invested in films by film producers and purely financial investors associated in so-called Agrupaciones de Interes Economico (AIEs) tax vehicles.
The tax deductions still leave investors on the hook for 82% of investment.
“The 18% isn’t enough on its own. We’ve also got to inspire confidence in Spain’s financial sector, which isn’t accustomed to invest in film production and sees it as a bohemian, risk sector. Changing this mentality will take time,” producer-director Ibon Cormenzana told Daily Variety.
A large question is if the Spanish film industry boasts many financially-grounded producers who can make a relatively small deduction work in favor of the film industry.
Other changes introduced by the new law:
* In a departure, TV movies and animation TV series will now be able to tap subsidies from Spain’s ICAA Spanish Film Institute: an important fillip for both sectors.
* Spanish films with non-E.U. directors will not qualify for Spanish subsidies unless they’re international co-productions.
Spain’s Fece exhibitors association has announced, given the law’s slight support for the exhibitor sector, that its members will only screen commercial Spanish titles from the New Year.
In order to comply with European film cinema screen quotas, circuits are likely to screen more commercial European titles.