The Government gives the green light to the reform of the Cinema Law

Temporarily, until 2018, the amortization aid in force until now (after the premiere) and the new ones (prior to its exhibition) will be maintained. It has also approved an extraordinary credit supplement worth 16 million euros.

This Thursday, the Council of Ministers approved a Royal Decree-Law which modifies the aid regime called amortization in film production, present in the 2007 Film Law, and replaces it with a new line of advance aid for the production of project-based feature films, which will coexist with the traditional selective aid for projects.

The new aid will allow the progressive financing of film productions during their development as the sector has been demanding, compared to amortization aid, which is called two years after the film's release, and which has proven to be an unsustainable model in times of budget shortage. This change will allow the financial costs of films to be reduced by more than 15%, and the aid will be allocated directly to production.

The Royal Decree-Law establishes a transitional period of three years, to provide financial security to the sector, in which the calls for new and previous aid, intended for amortization, will coincide. The first call for these automatic aid for the production of project-based feature films will be in 2016.

The Council of Ministers has also approved an extraordinary credit supplement worth 16 million euros to pay the pending amortization of 2014 and complete the 2015 budgetary needs for this film aid. The budget of the Cinematography Protection Fund this year will be 52.5 million euros.

Progressive financing aid

El régimen de la nueva línea de ayudas pretende adecuarse al ciclo de vida del proyecto de inversión cinematográfica, para mejorar la financiación de estas empresas y reducir sus costes financieros. En la convocatoria de las ayudas se determinará el porcentaje de pago que corresponderá a cada una de las fases de ejecución de la película, por ejemplo, ante la presentación del proyecto, el inicio del rodaje y la obtención de la calificación.

Advance aid will be granted automatically through the application of objective assessment criteria. These criteria, as well as their weighting, aspects that are already being worked on, must be specified in the Royal Decree and the Order developing this Law.

The determination of these objective criteria will address, among other aspects, the economic and financial viability of the project, the dissemination, distribution and marketing plan, the technical solvency of the beneficiary, the Spanish and European cultural relevance, the innovative nature of the project, as well as the socioeconomic impact of the investment in Spain.

When weighing objective criteria, in addition to taking into account the promotion of diversity and the promotion of film culture, productions whose objective is to achieve significant dissemination and commercial success will prevail, given that there are already other types of project aid that are intended to encourage new talents that may emerge on the Spanish film scene.

Model change

The change in the film financing model that is completed today began based on consensus with the sector, within the framework of the Joint Film and Audiovisual Commission, whose first result has been the modifications introduced with Law 27/20014, of November 27, on Corporate Tax, by which in addition to lowering this tax by 2 percentage points, the percentage of deduction for investment in film productions and audiovisual series was increased to 20% for the first million euros. An incentive was also created for foreign filming in Spain.

The Royal Decree Law also extends the obligation to report on the qualification that corresponds to the works to companies that provide video-on-demand services and to the owners of websites that offer ordered and classified lists of links to other websites or servers where cinematographic or audiovisual works are hosted.

Producers' reaction

The president of the Spanish producers, Ramon Colom, has indicated that "it is great news that, after the hard work carried out by FAPAE with the Administrations, we have managed to launch this new model. It is the culmination of work carried out for three years."

Colom has assured that "after this fundamental step, we will have to see how the text is specified in the legislative development. There will be a transitional period between one and the other of about three years, which will allow an orderly closure of the current system and financial security, giving coverage to the productions that are already underway. But we still have a lot of work to develop. From FAPAE, we will continue working intensely in this new stage that begins today."

There are pending issues, such as increasing tax incentives to make us equal with other cinematographies, but this is another matter and today is a day to celebrate,” he indicated.

In the negotiations held between the Ministry of Culture and FAPAE, it was essential for producers that in the transition between one model and another there was no legal uncertainty and a transitional period was marked, as well as that pending payments were met. The confirmation of the commitment by the Administration to resolve these payments is also excellent news for audiovisual producers.

“It has been a long period of negotiations, in which I want to influence the work carried out by the different agents in the sector and public administrations,” said Colom. "This process was initiated by my predecessor Pedro Pérez and continued by Joxe Portela, as acting president for six months. A work that we have developed with José Antonio Félez as president of AEC, with Fabia Buenaventura in her time as general director of FAPAE, and with the entire Confederation of audiovisual producers (representatives of the Federations and Associations) and that, after three years, today we have managed to have it approved by the Council of Ministers," the president concluded. of the Confederation, Ramon Colom.