Spanish Industry Calls for International Shoot Tax Break Upgrade

House of the Dragon
Courtesy of HBO

Key figures on Spain’s shoot scene have urged Spain’s film-friendly government to raise caps on incentives for international productions shooting in Spain to a muscular €30 million ($33 million) per title.  

Current ceilings are €18 million ($19.8 million) for the Canary Islands, €10 million ($11 million) for the rest of Spain.

The call for a muscular rise in incentives was made at Spain’s Málaga Film Festival, as industry figures including Fernando Victoria de Lecea, line producer on Wes Anderson’s 2021 Spanish shoot “Asteroid City,” sketched a possible roadmap to take full advantage of the country’s extraordinary $1.8 billion Spain AVS Hub state funding which has begun to flow into events such as Málaga’s Spanish Screenings and the bullush promotion of Spanish series at Series Mania.

Other panelists took in Carlos Rosado, president of the Spain Film Commission, Roberto Sacristán, head of Alianza Industria Audiovisual (ALIA) and Rosa García, president of RedCau, a network grouping five of Spain’s biggest film-TV clusters.

In contrast to so many Spanish industry panels at festivals down the decades, the panel’s mood was upbeat. 

Rosado recalled how the Spain Film Commission aided in the creation of Spain’s first international shoot tax rebate on local spend, instituted in 2015, 

As first-phase COVID-19 still raged, at the instance of Rosado and former U.S. Ambassador to Spain James Costos, Spain’s socialist government powered up international shoot tax breaks an original €3 million ($3.3 million) per title to €10 million on the Spanish peninsular. Deduction rates edged up from 25% to 30% of investment, 45% to 50% in the Canary Islands, the latter one of the highest rates in the world.

A recent Ampere Analysis study suggested that by 2020 Netflix and Amazon invested about €300 million ($327 million) in Spanish originals, a figure higher than that for any other country in Europe, apart from the U.K. 

Big international shoots, such as “House of the Dragon,” have begun to return to Spain. 

“We’re very happy with the institutional support we’re receiving so that the industry grows in an ordered, logical and reasonable fashion,” said Sacristán, ALIA president. “Spanish production is rising and it looks like the number of international shots which used to come to Spain could rise as well.”

“We’re in a magnificent moment,” said Victoria de Lecea, also president of Spanish line producers assn. Profilm He cited recent plans to reopen Spain’s Ciudad de la Luz studio complex in Alicante, which has won a reprieve from the European Commission. 

“The Spain AVS Hub plan has a cut-off point. I’d like to think that it isn’t a vitamin boost because we’re weak but a diet change so as not to need treatment afterwards,” he added. 

Part of that dietary boost could be fortified tax breaks. 

“We’re now in the Top 10 in terms of tax breaks. But  there’s room for improvement. The cap we currently have on incentives is attractive for certain types of titles but not for the very big shoots we’d like to attract to Spain,” said Rosado.

“Logically, if we could offer up to €30 million in tax breaks, the big shoots which come to Spain would do so not for just a few weeks but for the whole of their shoots, which would benefit the industry as a whole,” Sacristán added. 

For larger shoots, Germany’s DFFF federal fund rebate stands at 25% of local spend capped at €25 million ($27.5 million) per film. 

Since its introduction in 2009, France’s Tax Rebate For International Production (TRIP) was upped from an original €4 million to $11.2 million, then to $22.4 million and €30 million ($33 million) in 2016.

“If you study other countries, you can see that they all improved their tax breaks to face off with ever larger competition,” said Victoria de Lecea, who also line-produced Jacques Audiard’s “The Sisters Brothers.”

A cap hike was not the only issue on the table at a wide-ranging panel debate, moderated by Variety. Another is diversification, that shoots spread around Spain, taking advantage of its extraordinary attractions and talent outside traditional shoot centers, said Rosado.

As production builds. like Germany, Brazil and Mexico Spain faces an increasingly severe shortage of talent, not just of writers but technicians and service sector specialists. 

Training is one priority at RedCau, said Garcia. Another is to create more collaboration between members and also exchange best practices, she added. 

“If shoots flood into Spain, we have to be ready to respond in all parts of Spain, which means creating structures and infrastructure outside traditional centres,” she argued.