Spain Finalizes Deal to Lower Movie Ticket Tax, Boost Breaks for Industry

The move comes after more than a year of negotiations between the industry and various government ministries to craft a new film finance model.

MADRID – Spain’s Culture Ministry has reached an agreement with the country’s film producers for a new financing model that ramps up fiscal incentives for the industry and lowers the whopping 21 percent sales tax on movie tickets instated in 2013.

The long-awaited agreement, which comes six months after its deadline, is the first stage of talks between the so-called Film Commission and the country’s film industry, with another work committee studying the relationship between broadcasters and film production.

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According to the ministry, tax breaks that now sit at 18 percent for producers and 5 percent for private capital will be elevated to “at least 25 percent.”

The producers lobby FAPAE had asked for 30 percent, closer to France’s 36 percent and Germany’s 40 percent.

“We accept the conclusions of the work commission,” FAPAE’s new president, Ramon Colom, told Spanish daily El Pais. “We only would like to point out from the press release that the agreed-upon fiscal incentives were not 25 percent, but rather in a range from 25 to 30 percent. But it is a success to have arrived at these conclusions by consensus of all the implicated sectors.”

The ministry also highlighted the decision to lower the 21 percent sales tax on theater and movie tickets -- which the industry says is strangling companies -- but did not give a specific figure.

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As a raft of belt-tightening measures were introduced this year by an austere Spain looking to bring down its public debt, the sales tax skyrocketed from a special situation of 8 percent to 21 percent overnight.

The third leg of the commission’s pact with the industry is state subsidies, which will “prize the artistic quality of the projects and another automatic one that will be totally objective and universal.”

The ministry said it would “establish a points system” and that it would reduce the time lapse between granting the money and delivering it, as well as make the criteria clear and “reduce as much as possible the margin of interpretation of the norms.”

Spanish producers are still waiting for payment of subsidies from 2011-2012 productions.

While many in the industry were breathing a sigh of relief, Spanish academy president Enrique Gonzalez Macho sounded a note of caution.

“Even though it looks like all the sides agree, there is still a lot of work to do to create a new film model,” he said.