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Amidst a global pandemic that presented governments with a clear ethical dilemma between protecting their citizens’ well-being and the heartbeat of the economy, Spain’s government announced last May a robust hike in tax incentives that converted its tourism-driven economy into eye candy for big shoots and international productions.

Now, Spain’s film and TV industries are digesting its consequences: What are the foreseeable effects of the tax spike for locals in the still partially unforeseeable future?

Unveiled May 5, Spain’s new incentive rulings raises the cap on investors’ 25%-30% tax credits for Spanish shoots and local-spend rebates for visiting international productions from €3.28 million ($4.0 million) to €10.8 million ($13.1 million). The general thrust of the new regulation looks clear: a fast-growing industry, galvanized by new international market demand – think “Money Heist’s” viewing households on Netflix – now has even more tailwind behind it.

“Luckily, big audiovisual production in Spain is booming. Incentives have only increased them and increased spend, the number of shoot weeks, and size of shoots’ workforce,” says Adrian Guerra, producer of Sundance hit “Buried” and “Red Lights,” with Robert DeNiro.

The next step, he adds, is to have a large enough talent pool and to create sufficient infrastructure and mechanisms to put everything at the service of all productions in Spain. Guerra has walked his talk, creating a new venture, a Canary Islands-based company Orca, hosting a LED screen studio, using “The Mandalorian”-style technology.

The company’s base is by no means fortuitous. Over 800 miles from Spain, the Canary Islands enjoy a more advantageous fiscal regime, given their location on the periphery of the European Union. 25%-30% rates of deduction for Spain’s peninsula rise to 45%-50% in the Islands, lucrative conditions which Apple TV and HBO productions are currently benefitting from.

Some nitty-gritty still has to be put through, such as an awaited legislative amendment raising the Islands’ rebate and credit ceilings to a maximum reimbursement of €18 million ($21.8 million). But the impact of May’s announcement is clear.

“At the beginning of 2020, we had a series of inquiries and interest from foreign production companies. That’s now multiplied exponentially,” says Natacha Mora, co-ordinator of Canary Islands Film.

“If we manage to get Spain’s tax authorities to recognize a series of aspects incorporated into 2021 state budgets, affecting Spanish and international productions incentives, the new measures will turbo charge our shoot business,” she adds.

That takes in the offer of production services. In late January, Madrid-based Secuoya Studios announced its first production slate, packed by big series, including a new “Zorro.”

“We complete our product portfolio with this line [of production services] that serves to increase our business and its objectives and to be a focus of attraction for international producers,” says José Manuel González, management division head at Secuoya Studios.

Landscapes, climate, modest costs and now tax incentives can consolidate Span’s position as an international talent and shoot hub.

But providing production services is a fine art in Spain. As Secouya head of fiction, David Martínez points out that some parts of Spain  – the Basque Country, Navarre – have their own tax regimes.

Rebates and credits aren’t the only consideration, moreover. “Choice of locales must take into account locations, equipment and crew availability and the production design a shoot has in mind.” When servicing a production, Secuoya aims to provide legal and financial advice and even financial services, not just physical production, he adds.

Pan-Latin markets and production are consolidating fast. Big shoots shot last year in Spain after first-wave COVID-19, such as Alejandro Amenábar’s “La Fortuna,” starring Stanley Tucci. But, as pandemic still rages, there’s the promise of bright future ahead.