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3State incentives for specific industries

3.3 Audiovisual industry

One of the priority objectives of Cinema Law 55/2007 is to bolster the promotion and development of the production, distribution and showing of films and audiovisual works, as well as to establish terms favoring their creation and dissemination and to adopt measures for the preservation of film-making and audiovisual heritage.

Apart from the tax incentives applicable to the film-making industry, the following are some of the main incentives included in the Cinema Law and in Royal Decree 1084/2015, of December 4, 2015, which approves its regulatory implementation, as well as, among others, (i) in Order CUL/2834/2009, of October 19, 2009, approving the acknowledgment of film costs and producers’ investments, establishing the regulatory bases for the State aid and structure of the Administrative Register of Cinematographic and Audiovisual Enterprises (still partially applicable), (ii) in the subsequent Order CUD/769/2018 of July 17, 2018, updating the regulatory bases for the aid envisaged in Title III of the Cinema Law, (iii) in Order CUD/582/2020, of June 26, 2020, devoted specifically to regulating State aid for the production of feature films, as well, among others, (iv) in Order CUD/508/2021, of May 25, 2021, approving the regulatory bases for the grant of aid for film distribution.

In general, motion pictures or other audiovisual works, including those made under the regime for co-production with foreign companies, which intend to benefit from these incentives, must either have Spanish nationality or be in a position to obtain it by meeting the requirements for access to Spanish nationality pursuant to article 5 of Law 55/2007, of December 28, 2007. In this connection, works made by a Spanish production company or a production company from another EU Member State established in Spain, which had previously obtained the appropriate certificate from the competent body, are deemed to have Spanish nationality.

In the case of works made under the regime for co-production with foreign companies, incentives are available only to the Spanish co-producer or co-producer with registered office or permanent establishment in Spain, for the Spanish participation in the co-production.

In fact, one of the obligations imposed, in general, on all beneficiaries is to have their legal residence or establishment in Spain at the time of the actual receipt of the aid.

When the eligible activity is to be carried on jointly by various legal entities, in order to obtain the status of beneficiaries they must form a grouping of companies that will act through a designated representative entity with the capacity to act in the name and for the account of all members of the grouping, not only for the purpose of submitting the aid application and the supporting documentation, but also for the performance of the obligations resulting from the grant of the aid and its justification. The grouping can therefore not be dissolved until the statutes of limitations on recovery action and on the infringements envisaged in the General Subsidies Law have lapsed.

The structure of the aid system is, in brief, as follows:

Creation and Development
Line of aid
Eligible for aid
Maximum amount (€)
Scriptwriting of full-length motion projects6.Projects for the preparation of full-length motion picture scripts which comply with the terms of the call for aid applications and are evaluated on the basis of certain criteria (i.e. originality and quality, the film’s viability, etc.).€40,000 per project.
Development of full-length motion picture projects.The expenses need to develop the projects (improve the script, search for locations, identification of cast, initial sales plans, etc.). Projects that have received aid at the script writing stage will be given preference.It is established in each call but it cannot exceed €150,000, provided that such amount does not exceed 50% of the budget for developing the project or of the producer’s investment. The cost of the aid will be discounted from the cost of the motion picture when determining the producer’s investment.

Production
Line of aidEligible for aidMaximum amount (€)
Production of full-length motion pictures projects7.General.8Financing for the cost of producing projects that meet the general requirements to qualify for beneficiary status (residence or establishment, suitability, ownership of the property rights to the audiovisual work produced, relations with creative, artistic and technical staff compliant with applicable rules, reservation quotas, etc.) and that meet the requirements and conditions established by the common rules for general and selective aid (proof of cultural nature by obtaining the relevant certificate, proof of a certain amount of financing, universal accessibility measures, etc.).The maximum amount of the aid per project will be established in the call, within the annual credit allocated to the aid, which can be up to €1,400,000, provided that this amount does not exceed 40% of the cost acknowledged to the full-length motion picture by the Institute of Film-making and Audiovisual Arts (Instituto de Cinematografía y de las Artes Audiovisuales or ICAA)9.

A minimum of 35% will be reserved for projects directed exclusively by women and a minimum of 8% of the total budget will be reserved for animation projects, in both cases, provided that they attain the minimum points established in the call. The part of the credit not used, if any, will again be transferred to the general line.

Selective10.Financing for projects (i) of special cinematographic, cultural or social value, (ii) for a documentary, (iii) made by new film makers, (iv) or of an experimental nature.

In addition to meeting the general requirements to qualify for beneficiary status and the requirements and conditions established by the common rules for general and selective aid mentioned above, the projects must evidence a minimum percentage of financing and points. In the specific case of experimental projects, they are subject to certain requirements in connection with the maximum budget, demonstrable experience, and the percentage of the expense which impacts Spain 11.
Each call for aid applications will stipulate the maximum amount of the aid per project which, within the annual credit used for them, can be up to €500,000, or €300,000 for coproductions with foreign companies in which the Spanish stake is a minority stake, provided that such amount does not exceed 40% of the project’s cost recognized by the ICAA (with the possibility of extending it to 70% in the case of audiovisual works considered difficult).

Within the annual credit reserved for this line, a minimum of 35% will be allocated to projects directed exclusively by women and not less than 15% and not more than 25% will be allocated to projects for a documentary. Furthermore, a minimum of 8% must be reserved for animation products, and up to 10% may also be reserved for experimental projects and a minimum of 5% for coproductions with foreign companies in which the Spanish stake is a minority stake.

These reservations will be implemented provided that the projects attain the minimum points established by the call for aid applications. The portion of the credit that remains unused will be transferred to the general line.

In the case of experimental projects, the maximum amount of the aid per project can be equal to the percentage of the cost acknowledged by the ICAA related to the applicable maximum intensity.
Production of TV movie and documentary projects12.Production of films and documentaries for projects belonging to independent producers of TV movie and documentary projects which are longer than 60 minutes and shorter than 200 minutes, and which are not to be shown in movie theaters, provided that, among other requirements, they are filmed on photochemical medium or high definition digital medium. For a project to be eligible for aid, there must be a contract or a statement of interest in the project from one or more radio or television broadcast service providers.It will be determined in each call, although its amount will be calculated by applying the appropriate percentage, according to different tranches, to the amount of the budget (which cannot be less than €700,000), with maximum annual credit of €300,000, provided that such amount does not exceed the producer’s investment or 50% of the budget.
Production of animated series projects.Projects belonging to independent producers of animated series projects. For the project to be eligible for aid there must be a contract or a statement of interest in the project from radio or television broadcast service providers at the state, autonomous community or EU level.It will depend on each call, but it cannot exceed €500,000 for budgets exceeding €2,500,000, and €300,000 for budgets of lower amounts. In both cases, said amounts cannot exceed the producer’s investment or 60% of the budget.
Production of short film projects13.Short film projects and short firms made by independent producers, according to the score obtained from an evaluation committee or a collective body.Its amount can be equal to the percentage of the cost acknowledged by the ICAA related to the applicable maximum aid intensity. Aid for the production of short firms based on project plans is compatible with that for completed short films, up to the maximum ceiling of €70,000 per beneficiary film.

Within the annual credit allocated to this type of aid, a minimum of 35% will be reserved for short films directed exclusively by women.

Other aid
Line of aidEligible for the aidMaximum amount (€)
Distribution of Spanish, Community or Latin American films14.Independent distribution of full-length films and series of short films, mainly in their original versions, where, in the case of foreign films, less than 2 years have elapsed since their commercial release in the country of origin (in the case of a series of short films, at least 70% of the films making up the series must meet this requirement), which, in general, were destined for distribution in movie theaters with a minimum territorial scope, their opening complying with the conditions established in the call. The films that are the subject of the application must include, as universal accessibility measures, special audio description and subtitling systems that meet the relevant UNE standards.The aid may subsidize up to 50% of the cost of the making of copies, subtitling and dubbing, advertising and promotional expenses, anti-piracy measures, the technical means and resources invested in order to make the films universally accessible to persons with disabilities and the technical means and resources invested for their sustainability. For the purpose of this aid, the aforesaid costs cannot be subsidized where they have been acknowledged, in whole or in part, as an expense attributed to the producer.

Although the maximum amount of the aid to be granted is set in each call, it cannot exceed €200,000 per full-length beneficiary film or group of short films.

In addition, the amount received by a distributor (or a set of related distributors) within the same budgetary year cannot exceed 20% of the amount to be used in said year for this line of aid.
Distribution of Spanish, EU and Latin American films15.To boost the marketing of Spanish movies abroad to give the film industry a greater international presence. They are aimed at independent international sales agencies that are not majority owned by a non-EU company or by a provider of audiovisual media services or by a media group or have public capital. Such agencies must be entered in the ICAA Register of Cinematographic Enterprises and must have acquired the international sales rights to the movie under a contract or agreement signed with the producer of the film.

The maximum amount per film is €100,000 and in each case cannot exceed 50% of the eligible expenses (which, although they will be set in the call, may include advertising and promotion expenses, as well as expenses incurred in acquiring and renting a market stand).
For promotion.For the participation of Spanish cinematographic films and other audiovisual work, completed or in the pipeline, in international audiovisual events16To boost the international presence of the Spanish film industry and audiovisual production, for which support is provided both to completed Spanish films and other audiovisual works, and to Spanish projects that are still in the pipeline or preproduction phases (including co-productions although the Spanish participation must be at least 20%) that have been selected to participate in one of the events that are listed in the relevant call (including not only international festivals but also markets, forums, laboratories, or residences). Applications may be submitted by production companies, distributors or sales agencies that have incurred expenses associated with the participation of the audiovisual work in the event.Each call will establish the eligible expenses incurred by the applicant, among those inherent in the participation of the cinematographic or other audiovisual work, completed or in the pipeline. These include, among others, registration expenses, advertising campaign expenses (which must cover a minimum percentage of the maximum amount of aid envisaged for the event in question), promotional material expenses, expenses relating to teasers or trailers for presentation at the event, copy expenses; expenses incurred to hire public relations firms or press agencies exclusively to perform a job specific to the event, travel expenses for the authorial, creative or artistic team of the film, etc.
For the organization of film festivals and competitions in Spain17.Organization and holding by individuals or legal entities acting as promoters of film festivals or competitions of recognized prestige in Spain, and which devote special attention to the programming and dissemination of Spanish, EU and Latin American cinema, animated films, documentaries and short films, provided that at least two consecutive editions of those festivals or competitions have been held in the three years preceding the date of publication of the call for aid applications.
The aid may subsidize, up to the legally established limit, the expenses listed in the call relating to the preparation, organization, operation and promotion expenses of the festival or competition, as well as the technical means and resources invested to foster universal accessibility and the twin green and digital transition of the festival or competition. The amount of the aid will be determined in each call for aid applications and may not exceed €250,000.
For laboratories and incubators for the creation and development of audiovisual projects 18.Training, networking and tutoring activities carried out in the context of programs, forums, pitching platforms and residences in order to improve the skill and competitiveness of professionals and enterprises in the creative and development processes entailed in audiovisual digital projects (short films, full-length films, series, immersive and virtual reality stories, except for video games).

The initiatives for which an application is submitted must have held at least one previous edition or, in the case of new initiatives, must have in place people who handle the management, coordination or a head of studies with proven experience of at least three years conducting training and tutoring initiatives aimed at projects concerning audio visual work creation, promotion and/or distribution activities.
The amount of the aid applied for cannot exceed 80% of the eligible expenses of the project (which vary depending on whether the activity is in person or online) and cannot under any circumstances exceed €500,000 for 2022 and 2023.

The above catalog of aid is supplemented by the approval of Royal Decree 957/2022, of November 15, 2022, regulating direct grants of subsidies to halls and theaters for showing films in their role as essential agents in spreading cultural diversity and while society gets back into the habit of going to movie theaters and the adverse effects of the Covid-19 pandemic are entirely overcome in that regard. This aid is available to owners of halls or theaters for showing films (or of theater complexes) that maintained from January 1 to August 31, 2022, a 25% share, at minimum, of EU films and that meet the other requirements laid down in said Royal Decree. The maximum amounts of aid are set according to the number of screens that each hall or theater has and the percentage of sessions of EU films, calculated on the basis of the total of each hall or theater during the above-mentioned time period.

In addition, the ICAA is authorized to set up cooperation agreements with banks and other credit institutions with a view to facilitating and extending the financing of production, distribution and projection activities, technical industries and the video-making sector and for the development of infrastructures or the technological innovation of those sectors.

This financing alternative is materialized in various types of aid:

  • Aid for reducing interest on loans granted for production aimed at facilitating cinematographic production activities for production companies which had not received aid for the production of full-length motion picture projects.
  • Aid for reducing interest on loans granted for distribution and dissemination as film, video and via internet, or the technological renewal of these sectors.
  • Aid for reducing interest on loans for the financing of film projection and post-production infrastructures used by enterprises, laboratories, studios and the production and post-production technical industry.

Lastly, it may be noted that, on December 27, 2022, the Council of Ministers approved the draft of the new Cinema and Audiovisual Culture Law, which was submitted to the Lower House of the Spanish Parliament at the beginning of 2023 for urgent processing. It is currently in the amendment phase.

The legislation, which forms part of the “Spain, Audiovisual Hub of Europe Plan”, seeks to promote and boost the production, distribution and exhibition of audiovisual works, in addition to establishing conditions that foster their creation and promotion, as well as to adopt measures to protect and publicize Spain’s film and audiovisual heritage.

6 However, it should be noted that in 2022 no calls were published for lines of aid linked to scriptwriting for full-length motion projects or for the development of full-length motion picture projects regulated under articles 19 and 25 of Order 2834/2009, of October 19, 2009, and no calls are expected in 2023 (according to the information provided by ICAA).

7The call for general aid for the production of full-length motion pictures based on project plans for 2022 took place by means of the Decision of March 11, 2022, with a budgetary allocation of €52 million and with two deadlines for the call (already passed). As of the writing of this Guide, the call for 2023 has yet to be published.

8The general aid for the production of full-length motion pictures is incompatible with the selective aid for the production of full-length motion pictures based on project plans (which is described below).

9The payment of subsidies granted under this line envisages a first advance payment following the grant decision of a variable amount (in the call for 2022 it was 40% of the total), a second payment when the start of filming is notified to the ICAA and a last payment when proof of the performance of the financed activity has been provided to the ICAA so that the ICAA can issue a certificate of acknowledgment of the eligible production cost.

10By Resolution of the President of the ICAA of March 13, 2023, the call for proposals for this year was approved, with an estimated budget of 36 million euros, through two selection procedures. In this case, 40% of the budget is reserved for projects made exclusively by female directors, a minimum of 15% and a maximum of 25% for documentary projects and a minimum of 10% for animation projects.

11The requirements that projects must meet to qualify for this aid have, in certain cases, been relaxed in the terms described in Additional Provision Two of Order CUD/582/2020, of June 26, 2020, taking into account the economic impact of COVID-19 in 2020, 2021 and 2022.

12 However, according to the information available, the ICAA has not published any call for the lines of aid for the production of TV movies and documentary projects based on project plans or for the production of animated series based on project plans (to which we refer below) for the past several years. No calls are expected to be published in 2023 either.

13The calls for applications for aid for the production of short films based on project plans and of short films made for 2022 were published by the ICAA Decisions of March 5 and March 1, respectively, with a budgetary allocation of €1 million (in the former case) and €300,000 (in the latter case). As of the writing of this Guide, the call for 2023 has yet to be published, although it can be presumed that its features will not change significantly.

14The call for applications for aid for the distribution of full-length films and series of short films for 2022 was published by the ICAA Decision of February 28, 2022 and was definitively established by the Decision of August 22, 2022, granting aid to 97 projects for a total amount of €3,620,314.19.

15 The first call for this line of aid was published by means of the ICAA Decision of October 20, 2022, with a budgetary allocation of €3,000,000.

16The call for applications for the 2023 financial year for this line of aid was approved by Resolution of the President of the ICAA on 13 March with a budget of 800,000 euros.

17The 2023 call for applications for this line of aid was approved by Resolution of the President of the ICAA on 14 March and has a budget of 1.9 million euros.

18This line of aid was conceived in the context of the Plan to Boost the Audiovisual Sector presented in March 2021 and constitutes one of the pillars of the Digital Spain 2025 agenda, in which, recognizing the strategic importance of the sector, a new line of aid is developed to boost audiovisual creation by strengthening laboratories, incubators, residences and platforms and similar initiatives that share the objective of supporting projects in the writing phase and better access to the market and the public under better conditions to ensure their movement and profitability.
It is a single call for applications for aid for laboratories and incubators for creation and development of audiovisual projects carried out in 2022 and 2023 in Spain, and published by the ICAA Decision of December 30, 2021, with a budgetary allocation of €9 million for two years.