22/12/2005

The current subsidy system in Spain for film production is divided into 2 main sections:
1. subsidies for cinematic project production;
2. subsidies for active film producers.

1. The subsidies for cinematic Project production are 3:
- General help with the financing: gives 15% of the gross box-office numbers during the first 12 months, with a limit of € 901,518
- Complementary help to the financing: gives 33% of the producers investment (note!, the investment includes pre-sales and the M.G.), as long as the film has over €330,557 and no more than €600,000 in earnings. Funding can go up to €660,000 if the film earns over €390,000. If the film is made by debutant directors or filmed in one of Spain’s other regional languages (Catalan, Galician or Basque), a smaller amount of earnings is required for receiving this funding.

These two helps are automatic and complementary. If the director decides to apply for them, he must not earn over €900,000, and the funding will not go over 75% of his investment nor 50% of the film’s cost. Nevertheless, Spain’s Ministry of Culture allows production companies to include P&A costs. This shows a great level of knowledge of the film industry by the Spanish burocrats and legislators. This way, producers will be able to finance, even if it’s only partially, the distribution costs that distributors are not willing to cover.

- Funding for a new project: a selective subsidy for low budget, experimental, or films that include new directors. The amount depends on the national budget. (In 2003 the average subsidy was for €150,000, while in has now increased to €300,000)

2. Subsidies for active film producers:
- Subsidy for the preservation of film negatives: economic help for the production companies that keep the film’s original negatives in Spain. (up to 50% of the interpositve or internegative’s cost).
- Subsidy for the participation in festivals and markets (as long as the film is cosen for an international festival).
- Subsidy for financial costs: this is a subsidy given when the film is completed, premiered and audited. This way, the producers that decide to go for this funding through Spain’s Official Credit Institute, complying with the ICO-ICAA convention, he will be able to benefit from a subsidy that reduces the operation’s financial costs.

To this subsidies, we must add a complex and very useful incentive and tax deduction mechanism for film producers (creative and financial).