24/06/2014 - The Spanish government has set the tax deduction for film shoots in Spain at 20%, a mere 2% above the more-meagre-still 18% that is currently in force

Despite the great expectations that had been generated in the run-up, the long-awaited draft bill for tax reform, which included new clauses on tax deductions for film shoots carried out in Spain, has established this figure at 20%, a mere 2% higher than the more-meagre-still 18% that is currently in force in the country. This percentage, which is far below the European average and that of Spain’s neighbouring countries, has become a clear handicap for the production sector, which has for years been asking the government to adjust the figure.

Ever since it was revealed that Monday 23 June was the day when Finance Minister Cristóbal Montoro was due to explain the draft Corporation Tax Law in detail, Article 36 of which refers specifically to the film industry, assumptions were rife. The night before the explanation, the vast majority of the sector took it for granted that the percentage of tax relief would be established at somewhere around a satisfactory 30%, as a result of the many meetings that had taken place between representatives from the industry and the government.

Furthermore, the maximum deduction that a film can receive is €3 million, which means that international productions with budgets of over €15 million will not have much of an incentive to move their shoots over to Spain, a country that, with all its facilities, its weather and its pool of professionals, could clearly aim a lot higher.

Reactions have already been forthcoming, and Ramón Colom, president of Spanish producers’ lobby FAPAE, asserted: “We were hoping for more, and we think it is inadequate as laid out in the draft that we received. [...] It is a concern in terms of competition. With these figures, we are unable to compete with other countries (Germany, Italy and France have percentages of up to 40%), and the result is detrimental to the Spanish film industry.”

(Translated from Spanish)