Bidding to attract some of the biggest movies on earth for far longer shoots, Spain’s Canary Islands has powered up its maximum tax relief available on a single film lensed there to €36 million ($38.9 million) per movie. That is one of the highest movie shoot caps in Europe.
In a parallel move, ceilings on fiscal incentives enjoyed by TV productions – whether made for established players or streaming services – have been raised to an extraordinary €18 million ($19.4 million) per single episode. There is no limit on the number of episodes which can enjoy this facility.
Rolling off a Canary Island Special Zone (ZEC) tax status offered to regions on the periphery of the European Union, the Islands already offered one of the highest deduction rates for film and TV shoots anywhere in the world: 54% for a first €1 million ($1.1 million) eligible expenditure and 45% on further spend.
Capped at 50-60% of a total production budget, the Islands shoot incentives now rate among the biggest in Europe, comparing favourably to France’s, levied at 30% with a €30 million ($32.4 million) cap, and the U.K’s, offered at 25% of eligible spend though with no ceiling on relief save that it cannot exceed 80% of a production budget.
The new tax relief scheme came into force on Jan. 1, as mainland Spain powered up its own cap on tax rebates for international productions to €10 million ($10.8 million) per TV episode and $20 million ($21.6 million) for movie productions, with deduction rates set at 25%-30% – still highly attractive incentives.
Even when set before 2020 at a low €5.4 million ($5.8 million) cap, Canary Island fiscal facilities helped lure a tsunami of big Hollywood shoots, taking in “Clash of the Titans,” “Fast and Furious” 6, “Wrath of the Titans,” “Exodus: Gods and Kings,” “Heart of the Sea” “Jason Bourne,” “Black Mirror” Seasons 3-4, “Wonder Woman 1984,” “Eternals,” “The Midnight Sky,” “Peacemaker,” “The Head,” “The Witcher” and “Foundation” Seasons 1-2.
“Rambo V,” “Allied,” “Han Solo,” “Space Jam 2,” “The Book of Bobba Fest” and “The Mother,” with Jennifer López, have also lensed in the Islands. “Arcane,” one of Netflix’s biggest animated feature hits, was animated in part out of French animation player Fortiche’s studio in the Gran Canaria island.
“Jack Ryan” Season 4, “El Zorro” and “The Head” Season 2 shot in the Canaries in 2022.
Already, the Canary Islands is one of the most rapidly expanding audiovisual hubs in Europe, and the fastest growing in Spain, having almost tripled its size since 2016, ZEC President Pablo Hernández told Variety.
The Canary Islands is looking to grow all the more in the future, he added. Authorities are now aiming to turn the Canary Islands into an audiovisual and digital arts hub including videogames, which can also access a 45% tax credit.
To finance incentives to films and series incentives, the Canary Islands draws on a fund able to offer tax relief to €250 million ($270 million) worth of productions annually. It has yet to get near this figure in productions shooting in the Canaries but has initiated conversations with E.U. authorities to be permitted to expand this fund in the future, said Hernández.
As big international companies seek to travel less, in the interests of cost control and sustainability, two new soundstages, the Gran Canarias Platós, sized 1,800 sq. meters (19,375 sq. feet) and 1,200 sq. meters (12,916 sq. feet), counting annexes, open this Friday in the Canary Island, allowing big production to twin locations and studio work at the same base. Backlots are 2,500 sq. meters (26,909 sq. feet) and 1,400 sq. meters (15, 069 sq. feet) respectively.
Thanks to the Canary Island Special Zone, corporate income tax is levied at 4% in the archipelago, compared to a 20%-30% average in Europe, said Hernández.
Spanish productions can access tax rebates and also tax credits offered to Spain-based investors at the same 45%-54% deduction rate and $38.9 million cap for movies.