Spain's ICAA confirms budget cut of 40%; tax break dealt a blow

In all, 7 of the 11 lines of support from the ICAA will be cut.

If that news wasn’t bad enough, there was also disappointment that tax deductions for those who invest in cinema will not exceed 25%, a figure lower than the 40% the industry had hoped for.

Of the current 18% rate, de la Sierra said in a press conference: “It has not worked. But it’s not only a matter of how far we can go on this figure but to simplify the procedure.”

The results will not be revealed until the end of the year, when a new law to foster private patronage will be finally passed by Congress.

That is likely to be too little, too late for Spain’s struggling film industry. Pedro Pérez, president of the producers association, FAPAE, noted: “We are at the same point as we were. Unless we reach the 40%, this system will not have any result”. 

The Treasury Department has calculated the cut in cinema funding as 36.1%. The real figure goes up to 42% since the funds for financing films in Spanish communities have been cut from $11.7m to a mere $1.3m. 

The ICAA will have a final budget of $63.67m, half of which is calculated through the 2007 law that, according to Sierra, is still “our basis”. Since most of this money is already committed to pay the “redemptions” to films already released, a minimum of $45m, there is almost no money for anything else.

Those recoveries rely on the box office results and were created to encourage audience-oriented cinema.

Besides the aforementioned cuts, there will be no more funds for cultural projects, TV movies, investigation and screening.

There will still be aid for production ($3.9m), distribution ($3.2m) and conservation ($715,000). And funding will continue for the festivals of San Sebastián, Malaga and Huelva, in which the State is chair on the board. 

The only tiny bright light for the future was de la Sierra’s promise to improve the conditions of credit managed by the ICO, Official Credit Institute for business in order to “put immediately some cash in the production”. This must be still specified in the following weeks.