The cinema sector has become one of the main drivers of growth in the Spanish audiovisual industry. Spain's irresistible combination of historic cities and extraordinary natural parks is coupled with increasingly attractive tax incentives. 

As of January 1, 2023, the Basque province of Bizkaia plans to start offering a tax credit of up to 70% of the expenditure for domestic and international filming that takes place in its territory. In addition, the incentive will not be capped.

The tax exemption is one of the reasons promoting this sector, which has seen international filming arriving en masse in Spain. This is suggested by figures provided by Profilm, the association of Spanish line producers: 263 million was spent in 2021, double the annual average realized in 2016-19.

That increase came after the Spanish authorities raised the incentive ceiling in 2020 to €10 million per production, which in the Canary Islands was €18 million.

For international producers, legal certainty is just as important as tax relief. For Bizkaia, the new loan has been approved by the European Union authorities.

In addition, it is supported by the Government of Bizkaia, which manages its own tax collection. "The idea is to take advantage of tax incentives to strengthen our cultural and film industry, where we believe we have a lot to offer, attract outside companies, and promote our variety of locations around the world. We have a lot to gain there," said Ainara Basurko, head of economic promotion in Bizkaia.

The incentive of up to 70%—depending on the percentage of the budget that the production spends in Bizkaia—comes after "Game of Thrones" turned San Juan de Gaztelugatxe into an important tourist destination. More recently, the prequel "The Dragon House" has returned to this popular islet identified in the story as Dragonstone.

The new incentives also have a cultural aspect, showing the world the attractive scenery of Bizkaia, including the Guggenheim Museum in Bilbao, seen in James Bond's "The World is Not Enough."

"The size of the new tax exemption, one of the best in the world, puts us in a very competitive place worldwide," according to Carlos Juarez, president of the Basque Producers Association.

Investors in Bizkaia are joining the incentive. "'Game of Thrones' served as a wake-up call. The idea of investing in film and television is now much more common," noted Juárez.

Bizkaia's tax relief to bring increased interest in the audiovisual industry by local authorities. Just a few decades ago, it hardly mattered. Now, shows and films linked to Bizkaia are taking the lead in the international market. Juarez himself produced Galder Gaztelu-Urrutia's dystopian film "The Platform,"which was a sensation at the 2019 Toronto Film Festival and the second most-watched non-English language film on Netflix.

Filmed in locations in and around Bilbao, in its city hall and on Mount Anboto, the Txintxua Films production"Intimacy" jumped to number 1 in the world this June among non-English language Netflix series.

"Bizkaia has been generating talent, there is industrial infrastructure, different landscapes and historical places. It would be attractive even without an incentive," asserted Juarez.

In March 2021, the central government announced Spain's AVS Plan to invest €1.6 billion in the audiovisual sector as part of its pandemic recovery plan.

With the Canary Islands already offering incentives of up to 50% and Bizkaia reaching 70% in 2023, it is possible that other Spanish territories will also be encouraged to take the same path.