Cinema Law 55/2007 is aimed at bolstering the promotion and development of the production, distribution and showing of films and audiovisual works, and the establishment not only of terms favoring their creation and dissemination but also of measures for the preservation of film-making and audiovisual heritage.

Apart from the tax incentives applicable to the film-making industry, some of the main incentives included in the Cinema Law, which are to be granted by the Spanish Institute for Film-making and Audiovisual Arts (Instituto de la Cinematografía y de las Artes Audiovisuales or ICAA), consist of subsidies which vary in amount depending on the beneficiaries, for, inter alia (i) script-writing and project development; (ii) cultural and non-regulated training projects; (iii) aid for the amortization of full-length motion pictures and short films; (iv) aid for the distribution of films; and (v) aid for movie theaters.

The Law was implemented by Royal Decree 2062/2008, of December 12, 2008, which determines, among other aspects, the bases and conditions regulating aid and subsidies in the areas of creation, production and distribution of films, as well as the use of new technologies and the preservation of film-making heritage.

Please also note that Order CUL/2834/2009, establishing the regulatory bases for the aid provided for under Law 55/2007, and implemented by Royal Decree 2062/2008, has obtained the express backing of the European Commission, which declared it to comply with the Community laws on the matter.

Without prejudice to the incentives granted directly by the ICAA, referred to above, different agreements have been signed between the ICO and some relevant organizations. Thus, the Cooperation Agreement between the ICO and the ICAA on cinematographic production was executed with a view to funding the production of full-length motion pictures for which no aid had been granted by the ICAA on the project.

The ICO also has a Financing Agreement for audiovisual works with RTVE, FAPAE (Federation of Spanish Audiovisual Producers) and PROA (Federated Audiovisual Producers), executed on February 3, 2009 to manage aid to FAPAE and PROA member producers. In this connection, the maximum amount of the funding under this line is 100% of the price payable by the Sociedad Mercantile Televisión Española, S.A. for rights acquired in connection with eligible audiovisual works.

For further information, visit the extended version of our online Guide to Business:

Investment aid and incentives in Spain

Prepared by Garrigues

Last updated: 28|06|2011