Spain's APPA calls for new tax breaks for foreign producers

The APPA, or the Spanish association of audiovisual professionals, is urging the government to implant tax deductions for foreign productions that want to work in Spain. The group’s director, Fernando Victoria de Lecea [pictured], who has worked as line producer for international productions set in Spain such as Knight and Day and Cold Light of the Day, talks to Screen about the loss of competitive skills due to Spanish high prices and how to resolve this.

What is your proposal?
Spain has traditionally been one of the favourite spots in the world for foreign productions thanks to the good weather and great locations. A lot of highly skilled professionals such as Gil Parrondo, with two Oscars, were trained when Hollywood shot in Spain with big productions in the 1950s. With the Euro, costs went far too high and in the last few years we lost competitive status. At this point, the truth is that shooting in Spain is no cheaper than in the rest of Europe, as it used to be. We are asking the Government to help this productions to come to our country with tax deductions.

How would your proposed tax deductions work?
We have one fundamental competitive advantage which is the prestige of our artists (actors, directors, cinematographers) as well as our technicians and we are not using that as we should. The problem, again, is money, with a lot of our potential investors going to countries as Morocco or South America. Those tax deductions are used all over the world and they might work the following way, foreign productions must contract an Spanish company for the executive production. Then, when they have to pay their corporation taxes, the government makes a 20% discount that this company gives to the foreign investor.

How profitable are these foreign productions?
We have the case of the Ciudad de la Luz studios in Valencia, the best in Europe, that right now is empty. The Valencian government did a report and discovered that from every 15 euros that they had invested, the government cashed 85, that’s good business for everybody. That system had some legal problems and we propose to stick to the strict legality. In Europe those deductions cannot be higher than 20%. It’s enough to double foreign productions in this country.

What are another highlights of this system?
In recent years films like Narnia or The Price of Persia refused to work in Spain and if we had had those deductions in place this would not have happened. When we talk about the money that those productions are spending we are not talking only about the direct spend in the sector but also the global economic impact: hotels, restaurants, car rentals and etcetera. We are not asking the Government to give money through the ICAA (the Spanish government’s body for cinema) and the subsequent rise of the public budget. This is good for everybody and will not cost a penny of the general state budget.

What contacts have you had with the government?
Our first contact has been with ICAA and they are very supportive. Right now we are beginning meetings with all the ministeries involved: Economy, Industry, Tourism… All the sector is united on this because there is a risk of brain drain and we are already suffering from the halt in production. In a context in which public funds are being reduced dramatically and the general economic crisis, attracting foreign investors must be a top priority not only for the cinema sector but also for the general interest.