Spanish Film Industry Voices Disappointment Over 20 Percent Tax Credit Proposal

The draft tax credit lags behind the 25-40 percent offered by the U.K., Germany and other European nations, giving international productions little incentive to shoot in Spain, local producers say.

MADRID – Frustration and disappointment rippled through the Spanish film industry this week, when the Spanish government released a draft of the proposed fiscal reform that would set tax credits on foreign and local film investments at 20 percent.

“We were expecting more and, given the way the draft looks now, it seems insufficient. We hope to be able to amend it in the governmental and parliamentary process that remains. It’s a problem of competition. With these figures, we can’t compete with other countries (Germany, Italy or France have up to 40 percent) and the result is damaging for the Spanish industry,” said the president of the Spanish producers lobby FAPAE, Ramon Colom.

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The industry as a whole complained that the long period of negotiations between the government and the industry that concluded with a commission’s recommendation for 30 percent proved useless.

According to the draft, producers would receive a 20 percent tax deduction on the first million euros and 18 percent for everything over the first million, with a cap at €3 million ($4.08 million).

The measure is part of a Spanish government fiscal reform program intended to bring down Spain’s debt.

Spanish films with a budget of €30 million ($40.8 million) like Juan Antonio Bayona’s The Impossible would receive a maximum of €3 million in tax deduction.

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“I want to think that it’s a mistake and that there hasn’t been time yet to study the measures,” Impossible producer Belen Atienza of Apaches Entertainment told the Spanish daily El Pais. “There is no political will. In the government they aren’t aware that many people worldwide are watching what happens here. They just sank foreign expectations. Why should they come to Spain if in the U.K. they receive 30 percent?”

Atienza could likely have been referring to the World War Z sequel to be directed by Bayona, which could naturally have sought Spanish co-production.

“What bothers me the most is the disregard for all the work done, consultants hired, multiple meetings to explain how the sector works and the need for that kind of percentage so that someone would come shoot here,” Francisco Ramos, of Zeta Audiovisual, told El Pais.