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Spanish Tax Breaks Boost Production

Spain’s big shoot business is rocking, galvanized by more regional options and incentives that are highly competitive — at least in rates.

With a long tradition of hosting international productions, Spain earned larger global visibility after “Game of Thrones” filmed there from 2014 to 2018.

Production services has become one of the healthiest audiovisual sectors in Spain, driven by a golden age of local and international TV drama, as well as greater legal stability of its incentives. Spain’s mainland offers 20% tax rebates for international productions, capped at €3 million ($3.4 million); in the Canary Islands, the rate is 40%, with a €5.4 million ($6.1 million) ceiling.

“Tax advantages are attracting all kind of international productions,” says Nostromo’s Adrián Guerra, president of producers’ association Profilm.

“There are so many productions going on all over Spain that it’s becoming difficult to crew up on new productions,” he adds.

Challenges remain. The tax system is predominantly luring low-to-mid-range foreign projects.

“Many international producers would shoot their TV series or films entirely in Spain if the rebate ceiling was higher. This limitation prevents the arrival of bigger caliber projects,” says “Game of Thrones” line producer Peter Welter, Fresco Film CEO.

Every Spanish region is also its own story. Beyond Madrid, here is an update of some of Spain’s big shoot locales:

ANDALUSIA
The shoot fever continues in Andalusia, even after “Game of Thrones.” The focus is now on Málaga’s Costa del Sol, hosting no fewer than five drama series productions during first half 2018, four simultaneously.

Manga-inspired Netflix original series “Warrior Nun,” Serviced by Fresco, is created and executive produced by Simon Barry (“Ghost Wars”). The series films from April to July in Antequera, Málaga and Marbella, with actors Alba Baptista, Toya Turner and Tristán Ulloa starring.

“We looked at several location possibilities in Europe, but Spain offered the most epic range. In Malaga, we also found the perfect team to adapt to Netflix requirements,” said “Warrior Nun’s” Barry at March’s Freakcon convention.

Recently launched the Mediapro Studio has “The Paradise,” a co-production with Finnish broadcaster YLE, filming in Fuengirola, while subsid Globomedia is shooting Marc Vigil’s thriller series “Malaka,” with “Vis a Vis” star Maggie Civantos, in Málaga for pubcaster RTVE.

Mediaset España’s new primetime hit TV drama “Brigada Costa del Sol,” produced with Warner Bros. Intl. TV and Netflix, lensed in Torremolinos through February.

Atresmedia and César Benítez’s Plano a Plano shot thriller “Toy Boy” in multiple Costa del Sol locations.

Starting this month, Málaga will also host some shoots of Celine Dion biopic “The Power of Love,” produced by Gaumont and serviced by Andalusia’s Aralan Films.

In April, Sky Atlantic filmed miniseries “Little Birds,” serviced by Fresco, in Cadiz. Meanwhile, Seville is hosting an eight-week shoot of Sony Pictures Intl. Prods.’ “Adiós,” produced with Apache Films and La Claqueta and directed by Paco Cabezas (“Penny Dreadful”).

BASQUE COUNTRY
A Woody Allen feature, produced by film and TV giant the Mediapro Studio, rolls in San Sebastian and other Basque Country locations starting in July.

Allen’s new project has the option of tapping into a 30% shelter for Spanish film, TV and animated productions and co-productions, capped at 50% of total production costs, a tax credit policy derived from Basque Country’s fiscal autonomy.

The first HBO original TV series in Spain, “Patria,” is filming in San Sebastián, Soraluze and Elgoibar. It’s directed by Félix Viscarret and produced by Aitor Gabilondo-Mediaset España outfit Alea Media.

Another novel adaptation, Daniel Calparsoro’s “El silencio de la ciudad blanca,” set in Vitoria and surroundings, is produced by Atresmedia Cine and Rodar y Rodar.

CANARY ISLANDS
Two big U.S. productions, Warner Bros.’ “Wonder Woman 1984” and Lionsgate’s “Rambo V: Last Blood,” chose to partially lense in the Canary Islands, taking advantage of a whopping 40% tax rebate on foreign shoot spend.

Hosting 18 features and six series across 2018, similar to figures in the previous year, the total investment by audiovisual productions in the Canaries was €60 million ($67.1 million), doubling 2017 results.

“A growing trend is the increasing number of projects from Northern Europe,” says Natacha Mora, Canary Islands Film coordinator.

They include Corneliu Porumboiu’s Cannes Palme D’Or competitor “The Whistlers,” a Germany-France-Romania co-production filmed in La Gomera; and Germany’s “A Holiday With Friends,” a Bavaria Fiction-Degeto-ARD project. Russia’s “Some Like It Hot 2,” directed by Sarik Andreasyan, is also filming in the islands.

With singular tax legislation — incentives are some 20 percentage points higher than main parts of the Peninsula — the Islands also offer tax credits for Spanish productions and co-productions of up to 45% off the first million euros of the deduction base and 40% off the remaining amount, capped at $6.1 million per project.

Among Spanish features, Oriol Paulo’s Warner Bros.-backed thriller “Mirage,” a hit in China, and Atresmedia Cine’s Sundance premiere “Paradise Hills,” were both serviced in Gran Canaria by Macaronesia.

TV dramas entirely filmed on the islands include the first co-produced series from MovieStar +, “Hierro,” and Isla Audiovisual’s “La Sala,” an early pickup by HBO España.

“In recent years, the industrial fabric has grown and has been consolidated, propelled by both national and international shoots. There is a mature professional industry in the islands,” Mora says.

The islands are especially keen to support the animation industry. Beyond promoting the Quirino Awards for animated projects, several companies are setting up in Tenerife, such as prominent Spanish vfx company El Ranchito, an Emmy Award-winner for “Game of Thrones.”

A law passed in November set at $224,000 the minimum spend in the Canaries to qualify for rebates, opening the door to multilateral animation co-productions.

CATALONIA
The effect of Netflix’s expansion is being felt in Catalonia. Three Netflix projects — Weekend Studio’s Verónica Fernández-created series “Hache,” Isabel Coixet’s Berlin player “Elisa y Marcela” and Alex and David Pastor’s feature “Hogar,” teaming with Nostromo — recently shot there.

Top Spanish pay TV operator Movistar + filmed Leticia Dolera’s Canneseries Award winner “Perfect Life” in Cabrera de Mar, along the coastline.

“Most national productions filmed in Catalonia benefited from 20% tax credits,” says Carlota Guerrero, manager at the Catalonia Film Commission.

Examples include Javier Ruiz Caldera’s action comedy “Superlópez,” produced by Telecinco Cinema and Movistar +; Alice Waddington’s “Paradise Hill,” from Nostromo; and “Mirage,” shot in Barcelona, Terrassa Parc Audiovisual de Catalunya and L’Ametlla del Vallés.

A traditional hotbed for international commercials shoots, Barcelona issues approximately three of every four filming permits in Catalonia.

International projects shooting there include Korean series “Recuerdos de La Alhambra,” the third season of CCTV-1’s Chinese series “Wen Zhou Liang Jia Ren,” the second of Beta Film’s miniseries “Der Barcelona Krimi” and Canal Plus series “Vernon Subutex.”

NAVARRE
Navarre largely attracts shoots with its 35% corporate tax deduction for Navarre-based companies. These tax breaks are used by Spanish productions — or international shoots that gain Spanish nationality — spending at least 25% of budgets in the region.

“National films have tapped more into tax incentives in Navarre since their launch in 2015,” says Javier Lacunza, general manager of Navarre Culture, Sports and Leisure.

“Navarre’s tax system is becoming more competitive for Spanish than for foreign productions,” says Nostromo’s Adrián Guerra, who, teaming with Atresmedia Cine and Nadcon, shot rural thriller trilogy “El Guardián Invisible” in Baztán Valley.

Expectations on international shoots are high, however, especially after the simplification of AIE tax credit systems that will make it easier to attract overseas producers’ interest.

Among international shoots, China’s “Line Walker: Operation Midnight Shadow,” serviced by Babieka, filmed during last year’s San Ferm Festival, during which the famous running of the bulls takes place.

Lacunza highlights “the emergence and consolidation of animation projects” as “a subset of particular strategic importance for Navarre.”

Navarre-based animation company Apolo Films is preparing toon feature “D’Artacan” for June. New Gravity Laws worked on post-production and animation stages on “The Swallows of Kabul” and “Dino Games,” as well as other movies, TV series and videogames.

Pamplona will host the third edition of Conecta Fiction, the international TV drama co-production meeting, in June.

“It should be one more element enhancing the growth of our territory and its audiovisual industry sector. We hope for a return on the event in terms of shoots, relationships and new projects,” Lacunza says.

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