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The new tax framework greatly improves the system of incentives for the film industry in Spain. Certain regions in Spain have increased the applicable Tax Rebate to attract shootings to its regions. Therefore, international film and TV producers could apply to different rebates depending on the region and get up to 40 per cent deduction.

Companies entitled to apply for the tax rebate are Spanish Production Services companies and Spanish-Coproducers. The Tax rebate is not directly applicable to Foreign Producers; it is recouped by the Spanish partner and transferred to Foreign Producer.

Regarding the types of works that qualify for tax rebate are foreign films and TV shows filmed in Spain, including animated projects, and non-Spanish slate of International Co-Productions. Furthermore, it will be only possible to benefit from rebate if the investment done in Spain reaches a minimum of EUR1 million.

Both Law and administrative bodies provide information about which kind of investment can be subject to the deduction. The Law mentions two assumptions:

- The expenses of creative personnel provided that they have fiscal residence in Spain or in a Member

  State of the European Economic Area, with the limit of 100,000 euros per person.

- Costs arising from the use of technical industries and other suppliers.

The amount of this deduction cannot exceed EUR3 million, for each production made, and together with the other aid received by the taxpayer, cannot exceed 50 per cent of the cost of production.

In terms of obtaining the refund of the amounts paid as a result of the application of the tax, the Administration has a period of six months from the date of filing of the tax assessment. The tax assessment, according to Corporate Tax Law, shall be submitted within the period of 25 calendar days following the six months following the end of the tax period.

Currently, for example, for the 2020 tax period, settlements are filed in the month of July 2021. The Administration will proceed to return the amounts, when applicable, in February 2022.

The introduction of a Tax Rebate for international film productions is a positive step “per se”.

During the last five years, the certainty in the system has been increased. Financial teams of studios and streaming platforms learnt about Spanish Tax Rebate and they trust in it. It is important to say that Spanish Tax Authorities has been proactive in understanding the industry and the refund of tax rebate applicable per project has been released without objection.

As a consequence, Production Services has become one of the strongest audiovisual sectors in Spain. As Adrian Guerra, president of producers’ association Profilm, commented on “Variety” on September 2019, there are so many productions going on all over Spain that it’s becoming difficult to crew up on new productions.

These positive points, however, do not mean that we can take our eye off the ball, and we must be aware that there are certain areas that must be improved if Spain wants to become an international production hub like Atlanta, Vancouver or London.

Spain’s mainland offers 20 per cent tax rebate for international productions, capped at €3 million; in the Canary Islands, the rate is 40 per cent, with a EUR5.4 million ceiling.

The rate is attractive, but the problem is the cap. Projects above 15 million euros of expenses in Spain’s mainland don`t take advantage of the tax rebate because of the limitation of 3 million euros of maximum deduction per project.

At the same time, bottom line is also an impediment for independent European or Latin-american shows which find really challenging to meet the minimum 1 million eligible cost thresholds. Therefore, the economic part needs some work to be done by the Spanish Authorities. Other common headache is complying with Spanish Immigration laws and procedures.

The process for EU cast and crew is smooth, due to EU principles of free movement of workers. Law 45/1999, of 29 November, on the posting of workers in the framework of the transnational provision of services, transposes Directive 96/71/EC of the European Parliament and of the Council of 16 December 1996 concerning the posting of workers in the framework of the provision of services.

The business owner (Foreign Production Company) that post workers to Spain must notify the posting, prior to commencement and irrespective of its duration, to the local labour authority  in Spain where the services are to be provided.

During the posting, the following documents must be available for immediate consultation at the Spanish Production Office in digital format:

• Employment contracts for each worker.

• The payslips for each worker and the proof of payment of wages or salaries to each worker.

• Records of working hours, indicating the beginning, end and duration of the working day.

Third country nationals traveling to Spain under the purpose of attending a Cultural / Sports / Religious Event and Film Crews will have to apply for a short-stay Schengen visa (c Visa).

This kind of visa includes a Work Permit exemption acknowledgment on the basis they do not perform for more than five (5) consecutive days and a no more than twenty (20)nonconsecutive days in a 6-month period. Applicants could be Cast & Crew.As a rule, applications are processed within 10 working days. During that time the applicant must be outside Spain.

This timeframe, five consecutive days or 20 non-consecutive days, is a very tight schedule for most productions.

Other issue which is also a black spot is that applicants must attend personally an appointment at the Spanish Consulate Abroad in order to get their visa. Since October 2015, Schengen Visa authorities have made it mandatory for all the applicants to submit biometric data when applying for Schengen Visa.

The biometric data includes ten fingerprints and a photo. Once submitted, the biometric data for Schengen Visa application is stored in the Visa Information System (VIS), an online data-storage system allowing member states of the Schengen Agreement to exchange visa data. Once submitted, the biometric data remains valid for a period of six years.

Filming companies find difficulties in coordinating personal appointments for the cast and crew, mainly when they are already on set filming.

In the case of projects scheduled to be filmed in Spain for more than 20 non consecutive days, the only immigration option available would be to process an intercompany transfer work permit under the Law for Entrepreneurs but this type of permit would be issued based on the specific representation that the individual has been working for the company for, at least, three months  prior to requesting the work permit.

The permits could be processed once the individual has entered Spain leading to simplification of the processing. The work permit would be approved within 40 working days from the date of its application.

The three months seniority requirement is a problem in the Film and TV industry as teams are hired by project and casting and production companies doesn’t usually work with so much time in advance.

Other issue that should be addressed is that neither loan out companies’ personnel nor freelancers working for the project are eligible for this immigration scheme.

The Spanish Government must amend the immigration regulation in order to fit better with the Film & TV sector practices.

Since Spain declared sanitary emergency Due to Covid-19 crisis, 300 film shootings were cancelled or delayed in Spain.

Spain Film Commission, a non-governmental entity that brings together the public network of Film Commissions and Film Offices operating in Spain, published a plan of measures to alleviate large damage caused by the total stoppage of filming in Spain and to stimulate activity after the crisis:

1. Agreements with insurance companies and completion bond companies to bear cost of

    production hiatus.

2. Urgent improvement in tax incentives, expanding the percentage and the limits of tax refunds.

3. Marketing plan to promote Spain as a filming and film tourism destination.

COVID-19 has turned our lives upside down and its impact in the entertainment industry is worldwide and it will take long until teams will go back to work.

It is a troubling, unwanted experience that is taking us way out of our comfort zone.

Typically, crises result in some type of loss. The very nature of a crisis is antithetical to our core values of certainty and predictability as they vanish in an instant.

We desperately try to restore order to our lives, as chaos seems to prevail. Yet, if we learn to reframe how we see crisis, we might actually take advantage of it.

Steve Jobs might have felt self-defeated and victimised himself after he was fired from Apple many years ago. He chose otherwise. After his dismissal, he grasped the crisis by the horns, seeing opportunity where others did not. He went on to lead an animation company and turn it into the juggernaut that is now Pixar.

When The Walt Disney Company bought Pixar in 2006, Jobs immediately became the largest shareholder in Disney. The moral of the story is that unwanted change happens; look beyond it and embrace the discomfort.

Spain has been one of the first European countries to be shutdown due to Coronavirus and, therefore, it will hopefully be one of the first economies in getting back to “the new normality”.

During this time, the Ministers of Culture and Finance are meeting with representatives of the cultural sectors to listen to their proposals. It is the right time to make the amendments and improvements we suggest in this article. It is in the hand of the authorities to renovate and upgrade the framework so Spain could become an International Production Hub.


COVID-19 Pandemic: An Opportunity For Spain to Become an International Production Hub

Written by Helena Suárez

DA Lawyers

What have in common Game of Thrones, Terminator 6, Wonder Woman 1984 and The Crown? They are all successful TV series and films as most of you know, but one aspect that they have in common and it is not so obvious is that they were all filmed in Spain. Since 2015, in order to promote foreign investment in Spain, the Spanish Corporate Tax Law contemplates a tax deduction for foreign productions produced by a Spanish executive producer. This is a measure that involves a substantial development and enhancement of the audiovisual sector in Spain and it allowed the attraction of the filming of important audiovisual works.

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Helena Suárez


Helena Suárez Helena attended Pontificia de Comillas University (ICAI – ICADE), where she graduated in Law. In addition, she holds an Official Master Degree in Enterprises Legal Advice from the European Formation Center and Centro de Estudios Garrigues & Andersen. Additionally, she lectures at three Masters Degrees in Intellectual Property from Carlos III University, Autonoma University of Madrid (UAM), and Pontificia de Comillas University (ICAI – ICADE). Also, she has published some interesting articles, such as: “Guide for the drafting and negotiation of software contracts”, “Reflections in MAFIZ on the tax rebate model that Spain offers for international shootings”, and “Analysis of the new financing model of Spanish model”.

Finally, she is a member of several professional associations: International Bar Association, IBA. Officer IP Committee-Vice-Chair Entertainment Subcommittee, member of the DENAE and ENATIC, and ex national representative for Spain of the Young Commission Lawyers.