Spain has established itself as a key player in audiovisual production at both the European and global levels. It is an iconic hub due to its cultural diversity, wealth of filming locations, and favorable climate that allows for year-round filming. These characteristics, combined with a highly skilled workforce in creative and technical fields, have made Spain an attractive destination for international film and television productions for decades.
The Economic Impact Study of International Productions in Spain, commissioned by the Spain Film Commission and conducted by Olsberg SPI in collaboration with PROFILM, gathered data from a total of 165 international productions that benefited from tax incentives in Spain between 2019 and 2022. These productions generated a total expenditure of more than 1.32 billion euros in the Spanish economy during this period, resulting in an estimated minimum contribution of almost 1.8 billion euros to the national economy’s Gross Value Added (GVA).
Since 2015, Spain has offered a specific tax incentive for international productions filmed in the country. This incentive has been modified several times to improve its attractiveness and competitiveness in the international market. The incentive offers, nationwide, a 30% tax deduction on the first million euros spent on eligible expenses, and 25% on additional expenses. The maximum incentive is 20 million euros per production for feature films and 10 million euros per episode for television series.
In the Canary Islands, due to their special tax regime, the incentive is higher, offering a 50% deduction on the first million euros (54% starting in 2024) and 45% for additional expenses, with a limit of 36 million euros per production and 18 million euros per episode for television series. In addition to this national incentive, several autonomous communities with their own tax regimes have also developed their own incentives. For example, Navarra offers a 35% refund on expenses in the region, with a limit of 5 million euros per project. In the Basque Country, the provinces of Bizkaia, Gipuzkoa, and Araba have implemented incentives that offer, if certain special conditions are met, a refund of up to 70%.
Incentivized international productions generated a significant positive impact on employment in Spain. It is estimated that these productions created or sustained an average of 7,080 full-time equivalent (FTE) jobs each year across the Spanish economy during the 2019-2022 period. Of these jobs, approximately 1,300 were directly created by the productions, while the remaining 5,780 jobs were derived from indirect and induced impacts, i.e., supported by the supply chain and the general economy as a result of employee wage spending.
In terms of compensation, the study shows that the total accumulated remuneration for employees working on incentivized international productions was 989.9 million euros. This figure represents 55% of the total impact on Gross Value Added during the study period. Of this amount, 243.2 million euros were directly attributed to workers involved in the incentivized productions, while 746.7 million euros were distributed through indirect and induced impacts.
The study also shows that the territorial impact of the productions analyzed in this study between 2019 and 2022 reached, in one way or another, practically the entire country. It is worth noting that a significant portion of the spending was concentrated in four regions, which is consistent with the fact that three of them are the most populous in the country (Madrid, Catalonia, and Andalusia) and have historically developed infrastructures and services for national audiovisual production. In recent years, the Canary Islands have also joined these thanks to their more favorable incentive regime. Nonetheless, significant and growing impacts are observed in many other regions, and it is expected that this diversification will increase as the recent incentives in the Basque Country's regional territories consolidate, as well as various non-tax support systems that are beginning to be implemented in other parts of the country.
The analysis of the return on investment (ROI) of GVA, in terms of the relationship between public money invested by the government in incentives for international productions and the return achieved for the overall economy, shows that, between 2019 and 2022, the tax incentive program in Spain generated an ROI of 9 in terms of GVA. This means that every public euro invested through this program generated 9 euros in terms of GVA for the country as a whole.
The tax incentive program in Spain has proven to be an effective tool in attracting international productions, generating a significant economic impact on the country. The geographic diversification of productions, combined with competitive tax benefits, has not only contributed to the development of the audiovisual industry but also boosted employment and fostered economic growth across various autonomous communities. With a highly positive return on investment, Spain continues to solidify its position as an attractive destination for global audiovisual production, establishing itself as a reference in the international film and television industry.