Spain has introduced a new tax incentive that could give foreign or national film or TV productions an up-to-70% tax incentive off of their production spend within the Basque province of Bizkaia. In addition, the incentive currently has no cap at all, immediately making it a world-leading scheme.
For producers, the number is always great to see but whether that rebate will come back to the production accounts in a timely manner – if at all – is another matter. Something it seems the region has also thought of. The new credit has received approval from the EU authorities giving it another level of security, and it has been fully backed by the Bizkaia government which deals with its tax collection internally.
The record tax break comes as filming in Spain has dramatically increased. House of the Dragon has returned to shoot in the country as San Juan de Gaztelugatxe continues to double for Dragonstone as it did in Game of Thrones. Outside of the high-budget series, numerous other productions have come to film in the Southern European nation.
According to the ProFilm line producers association, €263 million ($263 million) was spent in the country during 2021. The figure represents around double the average spent between 2016-2019. The Spanish government has also raised the cap on incentives overall throughout the country to $10 million per title, the figure has grown to $18 million in the Canary Islands.
“The idea is to leverage tax incentives to strengthen our culture and film industries, where we think we have a lot to offer, attract outside companies and promote our variety of settings to the world. We have a lot to gain there,” said Ainara Basurko, Bizkaia’s head of economic promotion.
Part of gaining access to the incentive will be utilizing the region’s locations. Meaning a cultural test will be sought to access the rebate to make sure Bizkaia is getting its end of the bargain.
Talking to Joshua Ghazal, the president of Financial Match, he believes tax credits are one of the best ways for a country to help support businesses, especially after the pandemic.
“Yes this is of course great for Spain but for American production companies, studios, and other entities from different countries, this is great. We specialize mainly in helping companies get access to the maximum ERC credits, as most people don’t know what they can get. Similarly, with tax credits for film, productions can struggle with knowing which jurisdiction to go to, which tax credits to try and access, and if the locations in that country can ultimately fit with their narrative.”
“Also similarly to the IRS’ ERC program, what the Spanish credit can do for job retention and economic growth is amazing plus it is also uncapped. We were born out of a need to help American small business owners thrive. We’ve helped file millions in ERC Credits. These are direct cheques that go to small business owners. Our goal is always to make sure that businesses prosper and flourish by knowing what they can legally have access to via tax credits, especially in the rough times many firms are experiencing post the pandemic. I hope film and TV can help our economy 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 pushes to bounce back from the pandemic and stimulate the economy.