Spain Tax Incentives Entice ‘House of the Dragon,’ ‘Vampire Academy’

Arguably, no other established Spanish film and TV industry has grown faster over the last decade than its service sector for international shoots. Some of the world’s most favorable tax incentives have helped propel business to historic heights.

Kicking off in 2015, tax regs rose muscularly during mid-pandemic in 2020. But in December, the Spanish government took it up another notch, establishing tax advantages for international productions of up to €20 million ($22.2 million) per movie and $11.1 million for a TV series episode. That increase went into effect Jan. 1.

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With a special tax regime, the Canary Islands’ ceiling is $40.0 million for a film and a $20 mil- lion per series episode, some of the highest in Europe.

Discounts for foreign productions on mainland Spain are set at 30% for the first $1.11 million of deductible expenses and 25% for the rest. The Canaries offer a succulent 50%-45%. From Jan. 1, deduction rates in Basque Country’s Bizkaia reach up to 70% of spending on films and TV series, with no cap at all.

“We are already one of the most financially competitive destinations,” says Fresco Film co-founder Peter Welter, Spanish line producer of “Game of Thrones,” “House of the Dragon” and Netflix’s “Kaos.”

The amount of money spent on international shoots nearly doubled in two years, climbing from $146.5 million in 2019 to $292.8 mil- lion in 2021, according to Profilm. From 2017-22, the number of foreign productions tapping Spanish incentives rose from 23 to 100, their total tax relief rising from €16 million ($17.8 million) to €60.1 million ($66.7 million), according to Spain’s treasury.

Expectations are high going for- ward despite an October-March slight pause in foreign shoots’ growth. “The sector will be well above the 2019 figures and may increase little by little every year,” projects Fernando Victoria de Lecea, Profilm president and Spanish line producer of Wes Ander- son’s “Asteroid City.”

An increase in visiting productions and length of stay will be more clearly perceived by year’s end, with longer than before stays of foreign film and TV projects teams. Companies are spending more money on individual shoots in Spain, even if their number has decreased slightly, Victoria de Lecea notes.

Already Bizkaia is growing its infrastructure, with Toboggan Estudios opening a soundstage and Buendía Estudios production offices. “Prospects are really optimistic. The number of consultations about shooting in Bilbao-Bizkaia, including from platforms, has shot up. The sector’s at full employment,” says Agustín Atxa, Bilbao-Bizkaia film commissioner.

Calle Cruzada’s seasoned founder, José Luis Escolar, con- fesses he has never seen such a volume of production in Spain before. Nor such industry strength. “More productions mean more technician training,” he says. “Right now, a lot of people are being trained more rapidly than ever. Apart from investment, international filming generates a lot of knowledge.”

Beyond production facilities such as Alicante’s re-opened Ciudad de La Luz Studios or Madrid Content City at Secuoya Studios, private plans for new, ambitious production infrastructures, with both local and international financing, are underway.

“Big international producers must know that there is a real filming industry in Spain,” comments Escolar, whose first inter- national shoot in Spain was Steven Spielberg’s “Empire of the Sun.” He has just produced Universal’s “Vampire Academy” totally in Spain, with a crew that was nearly 100% Spanish.

Further factors are helping to improve the confidence of foreign productions. Tax incentives are guaranteed by Spain’s treasury, and as of 2021, U.S. and British film crews do not need visas for under 90-day stays in Spain.

“Industrial growth is generating a breeding ground that facilitates fluid movement of companies between different production sectors,” observes Fabia Buenaventura at ICEX.

Increasingly, big Spanish production houses, such as Barcelona-based mini-major Filmax, are launching services arms for international shoots.

“More and more international shoots are taking place in Spain. Added to a greater support pro- vided by public administrations, this means  new  opportunities to lure productions and new clients,” says Iván Díaz, Filmax head of international.

“Attracting shoots will be an important part of Filmax’s strategy at international markets,” adds sales executive Claudia Nario.

Since the heydays of producer Samuel Bronson and Charlton Heston’s “El Cid,” Spain has increasingly attracted major international shoots, driven by its extraordinary landscapes and historical heritage, long hours of sun and accessible costs. This heritage has created a diversified industry. Leading Spanish line producers such as Sur Film and Palma Pictures also offer production services on commercials, a highly profitable activity that earned $584 million in 2021 for the sector, 39% of that coming from international productions.

“There is a huge influence [bet- ween ad and film shoots],” says Adriana Piquet, general director of APCP, Spain’s advertising producer association. “Our sector laid the foundations of agility in permits, short deadlines to set up an international production and dealing with foreign clients.”

“Ad producers are increasingly involved in fiction and services, services companies produce fiction, fiction producers provide services — it’s a continuous flow of resources.

That’s a symptom of industry growth, consolidation with resources’ flowing according to market demand,” Buenaventura says.

“I hope that Spain’s audiovisual industry continues on this path – to becoming a powerful alternative to more traditional industry contributors – construction, tourism, agriculture – to Spain’s gross domestic product,” Welter says.

John Hopewell contributed to this article.

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