Spanish State Aid For Film Finance Approved

by Ulrika Lomas, Tax-News.com Brussels

29 January 2010

The European Commission has given approval, under European Union (EU) state aid rules, to a film support scheme drafted by the Spanish government that will provide ventures with funding of EUR576m until December 31, 2015.

The scheme covers Spain’s national film support measures including film production and distribution. The Commission found that the scheme is compatible with Article 107(3)(d) of the Treaty on the Functioning of the European Union, which allows aid to further cultural objectives under certain conditions. In particular, the scheme is in line with the rules of the Commission's Cinema Communication.

Competition Commissioner Neelie Kroes commented: "I commend the Spanish authorities for targeting the aid to increase the cultural diversity of films available to Spanish audiences. This scheme should improve the visibility and popularity of Spanish independent films, not only in Spain but worldwide, without unduly distorting competition."

The scheme is a package of complementary selective and automatic measures which the Spanish authorities believe are necessary to achieve their objective of preserving linguistic and cultural diversity among the films available to Spanish and European audiences. The selective support is intended to sustain arthouse films while the automatic, audience-based support aims to encourage independent producers to make better-financed films rooted in Spanish/European culture.

In 2008, US films accounted for 71.5% of the Spanish market. During its assessment, the Commission received submissions raising concerns about the automatic, audience-based support, including allegations that the aid was not available to films under EUR600,000. In fact, films under EUR600,000 can benefit from the selective support and from part of the automatic support within the scheme. Consequently, the Commission considers that the Spanish scheme is compatible with EU rules. Member states are entitled to limit their film support to certain films and audiovisual works provided that the aid is directed towards a cultural product, which the Commission has verified in this case.

The Spanish authorities have committed to implement any changes that may be required by changes to the relevant state aid rules before the end of the scheme.

Recommended