Aid to the Audiovisual Industry for the Production of Cinematographic Works and Audiovisual Works in the Valencian Community

Object and Financing of Audiovisual Grants

Decree Law 5/2023, of March 16, approved by the Consell de la Comunidad Valenciana (Council of the Valencian Community), establishes the regulatory framework for the granting of cinema and audiovisual grants and subsidies through a competitive procedure, with the aim of promoting and providing incentives to the audiovisual industry in the Valencian Community by financing production and post-production projects of audiovisual works, whether they are of Spanish or foreign nationality, including production and post-production expenses that take place in the Valencian territory.

The amount allocated for the financing of the grants amounts to 6,500,000 euros, distributed over three years: 2023, 2024, and 2025. In 2023, the expected amount is 2,500,000 euros, 3,500,000 euros for 2024, and the rest for 2025, all subject to the availability of sufficient credit to cover these amounts in the budget laws of each fiscal year.

This amount can reach up to 10,000,000 euros if the conditions established in Decree 77/2019, of June 7, of the Consell, which regulates the management of the budget of the Valencian Government, are met, subject to the availability of credit and prior budget modification before granting the subsidy. In cases of unforeseen increase due to credit availability that enables a complementary resolution to the granting of subsidies, applications that have met all the established requirements but were not initially granted due to the credit being exhausted may opt for such subsidy.

Audiovisual production grants are awarded as non-repayable funds and are announced annually on a multi-year basis, covering three budgetary years, financed according to the credits approved in the Budget Law of each year by the Generalitat. In each call, the amount of the grants and their distribution over the years are established, and the maximum amount of the grant will be limited to the financial needs of each project at the time of the application, in accordance with the financing plan submitted. When a project is funded by other grants, it cannot benefit from the grants awarded by the Valencian Community, although it may be eligible for a subsidy for the part not covered by the previously granted aid(s).

What are the principles and requirements established for the granting of audiovisual production grants in the Valencian Community?

The granting and implementation of grants for cinema in the Valencian Community is regulated by the General Subsidies Law in terms of principles such as publicity, transparency, competition, objectivity, equality, and non-discrimination, as well as by Law 1/2022, of April 13, on Transparency and Good Governance of the Valencian Community.

The granting procedure is processed through a competitive basis, and can be accesed by audiovisual production companies that develop projects for film or audiovisual works, both national and foreign, and that contribute to the economic and productive sector in Valencia by incurring production and post-production expenses in the region of at least 2,000,000 euros, with a global production cost of at least 4,000,000 euros.

According to the Regulation on State Aid, this minimum expenditure established for productions carried out in the Valencian Community cannot exceed 50% of the overall project budget, and the calculation base must be less than 80% of the overall budget.

Grants awarded for cinema and audiovisual works in the Valencian Community are given to feature-length and short films, films and television series (both fiction and documentary), and animation projects. Works directly produced by individuals providing audiovisual communication services and television operators; works fully funded by Public Administrations; works with primarily advertising content; works containing political propaganda; X-rated films; works that do not comply with intellectual property rights transfer regulations; works declared by a final judgment to be criminal offenses; or works produced by companies with labor debts under applicable regulations are not eligible for grants.

The grants can be combined with other grants or subsidies as long as the total amount of the grant awarded, whether in isolation or simultaneously with others granted by Public Administrations or private or public bodies, does not exceed 50% of the budget allocated to the production or audiovisual work. This limit can reach 60% if the production is financed by more than one European Union member state and involves producers from more than one EU member state.

Works considered "difficult" are exempt from the above-mentioned intensity limit, as established in RD 1084/2015, of December 4, which develops Law 55/2007, of December 28, on Cinema. This RD defines "difficult work" as follows:

• Short films
• Works in which the Director has not directed or co-directed more than two feature films eligible for commercial exhibition and whose budget has not exceeded the sum of 1,500,000 euros
• Audiovisual works entirely shot in co-official languages other than Spanish that are projected in Spain in that language
• Works directed by Directors with a disability level recognized as being higher than 33% by a competent body
• Works exclusively made by female Directors
• Audiovisual works of special cultural and artistic value that require exceptional support
• Documentaries
• Animation works with a budget below 2,500,000 euros
• Works co-produced with Ibero-American countries

Who can benefit from these grants for cinema and audiovisual production in the Valencian Community?

Companies dedicated to audiovisual production, including economic interest groups registered or having submitted the registration application at the time of applying for the grant in the Administrative Registry of Audiovisual Companies of the Valencian Community or in the Administrative Registry of Cinematographic and Audiovisual Companies of the Institute of Cinematography and Audiovisual Arts (ICAA), as well as any other administrative registry of audiovisual companies in Spanish territory, and national production companies from European Union member states that are authorized in their countries of origin to carry out audiovisual productions, provided that they have a permanent establishment in Spain, can benefit from these grants for cinema and audiovisual production in the Valencian Community.

Companies that are ineligible for grants due to non-compliance with regulations, as well as in cases provided for in Law 38/2003, of November 17, cannot benefit from grants for cinema and audiovisual works.

In the case of co-productions, whether national or international, a co-producer will be designated as the beneficiary if they meet the corresponding requirements, and co-producers will be jointly responsible for compliance with the regulations.

What obligations do beneficiaries of grants for cinema and audiovisual production in the Valencian Community have?

In addition to those established in the General Subsidies Law, the following obligations are set:

• To prove to the granting entity the completion of the activity and compliance with the requirements and obligations established in the call's guidelines.
• To comply with the requirements set forth in the General Subsidies Law.
• To retain the documentation that justifies the use of the funds received.
• To collaborate and facilitate financial verification and control in accordance with the purpose and destination of the granted subsidy.
• To report the receipt of other grants or subsidies for the same purpose from any public or private administration or entity.
• To comply with the publicity obligations of Law 1/2022, of April 13, on Transparency and Good Governance of the Valencian Community.
• To justify the granting of the subsidy according to the regulations established for that subsidy.
• To refund the funds received in the cases provided for in the General Subsidies Law and the LPHS Law.
• Not to have a recovery order from the European Commission declaring the grant illegal or incompatible.
• To have the accounting books and other documentation required by the commercial legislation applicable to the beneficiary, as well as accounting records and others specified in the regulatory guidelines for the grant.
• Any other obligation established by national, regional, or European Union regulations.

Both general and specific subsidy requirements and obligations can be proven through a sworn declaration.

Finally, the public nature of the grant must be made public in accordance with the provisions of the General Subsidies Law and the Transparency and Good Governance Law of the Valencian Community.

What expenses are eligible for grants for cinema and audiovisual production in the Valencian Community?

The eligible expenses are those incurred by the beneficiary company as the cost of production and post-production of national or foreign cinematographic or audiovisual works until the standard copy or digital master copy of the work is obtained, provided they occur in the territory of the Valencian Community within the established time frame for each call. The eligible expenses include:

• Expenses incurred for services in the Valencian Community when the service provider has a tax residence in this Community.
• Expenses for the acquisition of used goods for the production covered by the grant, made to individuals or entities with a tax residence in the Community.
• Depreciation expenses incurred for elements of tangible or intangible fixed assets when they are used in the Community and the supplier has a tax residence in the territory. In the case of partial use, the proportionate cost corresponding to the use in the territory will be considered an expense.
• Salary expenses for employees under a labor regime if the work or services are provided in the Community. For telework cases, the expense will be considered when the worker has a tax residence in the Community.
• Water, electricity, and electricity expenses incurred in the Valencian Community.

These expenses apply to those incurred by the production company as well as those caused by subcontracting.

Tax payments made by the production company are considered eligible expenses, except for indirect taxes that can be recovered or offset.

What is the amount of the subsidies and grants for cinema and audiovisual production in the Valencian Community?

The amount of the grant or subsidy for cinema and audiovisual production in the Valencian Community will be 25% of the expenses incurred in the Valencian territory per project, provided the minimum expenditure requirements in the Community are met, within the expressed intensity limits.

The grant or subsidy for cinema and audiovisual production in the Valencian Community is awarded per cinematographic or audiovisual work, with a maximum of two works per production company that can be requested in a single call.

The maximum amount that can be requested is 1,500,000 euros, as long as this amount does not exceed the aforementioned limits.

What basic requirement must cinematographic and audiovisual works meet to apply for grants for cinema and audiovisual production in the Valencian Community?

To access the grants or subsidies for cinema and audiovisual production granted by the Valencian Community, cinematographic and audiovisual works that apply for such grants must demonstrate the cultural nature of the work.

What criteria are used for the evaluation of projects?

The grants for cinema and audiovisual production in the Valencian Community are awarded based on the principles of publicity, transparency, objectivity, equality, and non-discrimination through a competitive procedure to companies that meet the mentioned requirements and carry out activities eligible for the subsidy.

The evaluation is based on the information provided by the applicant.

Once the requirements for the grant have been met, the Evaluation Committee evaluates the projects that pass the initial phase based on the following criteria:

1. Expenses incurred in the Valencian Community during the production and post-production phases, according to the eligible expenses: Up to 45 points if the expenses exceed 10,000,000 euros. The points awarded decrease depending on the amount by which the expenses decrease, with a minimum of 7 points for expenses between 2,000,000 and 3,000,000 euros.
2. Socioeconomic criteria: Up to 55 points.

The following are assessed:

• Participation of technical teams residing or having a tax residence in the Valencian territory, up to 15 points (0.5 points per technician and 2 points per Team Leader).
• Participation of artistic teams residing or having a tax residence in the Valencian territory, up to 5 points (1 point per professional Valencian performer participating in the project, 0.5 points if it is an animation project).
• Hiring of audiovisual service companies for filming or post-production that reside or have a tax residence in the Valencian territory, up to 10 points (2 points per hired company).
• If the production company or a co-producer residing or having a tax residence in the Valencian territory has been registered for more than 10 years in the Register of Audiovisual Companies of the Valencian Community, 10 points.
• Participation of women, up to 12 points (1 point per each managerial position).
• Hiring individuals with a recognized disability level higher than 33%, 1 point.
• Hiring individuals on traineeship contracts, up to 2 points.

All contracts must be related to the cinematographic or audiovisual work for which the subsidy is requested.

During this phase, the Project can be presented to the Evaluation Committee for a 15-minute defense, and the company can be summoned before the Committee to address questions or confirm data.

The maximum score is 100 points.

The Committee may distribute the subsidy among projects that exceed 50 points of evaluation, according to the ranking order, until the total budgeted amount is exhausted.

Projects that do not reach 50 points will be placed on a waiting list in case the budget is exhausted but any of the initially proposed companies are unable to receive the grant, in order of highest to lowest score.

What services does "CAMALEÓN CINEMA SERVICES" offer to production companies that want to apply for a grant or subsidy for cinema and audiovisual production in the Valencian Community?

At "CAMALEÓN CINEMA SERVICES", we specialize in audiovisual production to provide the necessary guidance and a deep understanding of the requirements for applying for grants or subsidies for the film and audiovisual industry in the Valencian Community. We have a team of specialized personnel who are responsible for obtaining the necessary documentation and certificates to submit a grant application, and we also provide support throughout the entire granting process, whether it's for production of film projects, short films, series, or documentaries.

Our team is equipped to facilitate and advise on the grant application process for cinema and audiovisual production in the Valencian Community. We have in-depth knowledge of the regulations governing the granting of these grants and subsidies, and we also provide the necessary technical and human resources to carry out an audiovisual project in the Valencian territory. We also evaluate the possibility of combining the grants applied for in this community with others of a public or private nature, as well as potential tax deductions.