Spain has introduced a new tax incentive that could grant foreign or domestic film or television productions a tax incentive of up to 70% on their production expenditure in the Basque province of Biscay. Additionally, the incentive currently has no caps, immediately making it a world-leading program.
For producers, the number is always interesting to see, but whether this discount will return to production accounts in a timely manner – if at all – is another matter. Something, it seems, the region has also thought about. The new credit has been approved by EU authorities, giving it an extra level of security, and it has been fully backed by the government of Bizkaia, which handles its tax collection in-house.
The record tax relief comes as filming in Spain has increased significantly. House of the Dragon is back to film in the country as San Juan de Gaztelugatxe continues to dub for Dragonstone as he did in Game of Thrones. Apart from the big budget series, many other productions have come to shoot in the Southern European nation.
According to the association of line producers ProFilm, 263 million euros ($263 million) was spent in the country in 2021. This figure is about double the average spent between 2016 and 2019. The Spanish government has also raised the cap on aggregate incentives nationwide to $10 million per title, this figure rose to $18 million in the Canary Islands.
“The idea is to take advantage of tax incentives to strengthen our culture and film industries, where we believe we have a lot to offer, attract outside businesses and promote our variety of settings to the world. We have a lot to gain from it,” said Ainara Basurko, head of economic promotion for Bizkaia.
Part of the incentive access will be to use area locations. This means that a cultural test will be sought to access reimbursement to ensure Bizkaia gets its end of the bargain.
Speaking to Joshua Ghazal, the chairman of Financial Match, he thinks tax credits are one of the best ways for a country to help support businesses, especially after the pandemic.
“Yes, of course it’s great for Spain, but for American production companies, studios and other entities in different countries, it’s great. We mainly specialize in helping companies access the maximum of ERC credits, because most people don’t know what they can get.Similarly, with film tax credits, productions can find it difficult to know which jurisdiction to go to, which tax credits to tax try to access and whether the places in this country can ultimately match their narrative.
“Similar to the IRS’ ERC program, what Spanish credit can do for job retention and economic growth is incredible, and it’s also uncapped. We were born out of a need to help American small business owners thrive. We’ve helped deposit millions of ERC credits. These are direct checks that go to small business owners. Our goal is always to make sure businesses thrive and thrive knowing what they can legally access through tax credits, especially in the difficult times many businesses are experiencing post-pandemic. I hope that cinema and television can help our economy to grow as well as many others. In doing so, it is important to know what you actually have access to and how much you can get.
Other parts of Spain are now also set to introduce similar incentives as the country strives to rebound from the pandemic and boost the economy.