The highest film tax credit in the EU. Not a rumour — the Norma Foral.

All three Basque historical territories now apply a converged structure: a 60% deduction on the deduction base when more than 50% of eligible investment and expenditure is located within that territory, a 50% deduction when the territorial share sits between 35% and 50%, and a 10-percentage-point uplift — bringing the rate to 70% and 60% respectively — for works whose sole original version is in Basque (euskera).

Bizkaia was first to reform, effective 1 January 2023. Gipuzkoa followed with Norma Foral 2/2024 (10 May 2024), applied retroactively from 1 January 2024. Álava followed with Norma Foral 9/2024 (22 May 2024), in force from 8 June 2024 with a transitional regime for productions already underway. The three territories now offer materially identical headline rates, though each retains its own procedural detail.

The deduction base is the total cost of production plus the costs of obtaining copies, advertising and promotion borne by the producer — with no additional cap on that combined figure in the Basque regime, unlike the 40%-of-production-cost sub-limit that applies under the common territory rules of Art. 36.1 LIS.

Bizkaia: Article 66 quater (and 66 quinquies) of Norma Foral 11/2013, de 5 de diciembre, del Impuesto sobre Sociedades, as introduced by Norma Foral 9/2022, de 23 de noviembre. These provisions replaced the former Disposición Adicional Decimoquinta, which continues to apply only to productions initiated before, and not completed by, 1 January 2024 (transitional regime). See Orden Foral 196/2024, de 5 de junio, of the Bizkaia Diputación Foral.

Gipuzkoa: Article 66 bis of Norma Foral 2/2014, de 17 de enero, del Impuesto sobre Sociedades, as substantially rewritten by Norma Foral 2/2024, de 10 de mayo. Prior to this reform, Gipuzkoa applied lower rates (35%/45%) under Norma Foral 1/2022; the 2024 reform explicitly aligned Gipuzkoa with Bizkaia's 60%/70% structure.

Álava: Article 66 ter of Norma Foral 37/2013, de 13 de diciembre, del Impuesto sobre Sociedades (Territorio Histórico de Álava), as amended by Norma Foral 9/2024, de 22 de mayo, in force from 8 June 2024.

All three reforms were cleared under EU State Aid rules, each backed by an approved aid scheme (Gipuzkoa and Álava: approximately €150M each, in force until 31 December 2028). This detail matters for investor due diligence: the incentive is not a temporary administrative concession but a notified, Commission-approved State Aid scheme.

Eligible works include feature films, short films, and fiction, animation or documentary audiovisual series. The determining test is the proportion of the deduction base — production cost plus copies/advertising/promotion — actually incurred within the relevant historical territory (where the taxpayer has its tax domicile, in Bizkaia's case; within the wider Basque Autonomous Community footprint under Gipuzkoa and Álava rules, subject to territorial thresholds). A minimum 35% territorial spend is required to access any enhanced rate; below that threshold, the ordinary common-territory rates under Art. 36 LIS would typically apply instead.

Non-resident executive producers can access the Basque deduction, but only on the costs they themselves directly bear, and only where the underlying producer is not resident in Spain and does not operate through a permanent establishment there. Certain categories of "difficult" works — documentaries, animation, low-budget productions (under €1M), works directed exclusively by women, first-time directors and works with a disability-inclusive cast or crew — benefit from relaxed intensity limits above the standard 50%-of-budget State Aid ceiling.

1. Official co-production

   A Basque production company holds a genuine equity and creative stake in the work, typically under a bilateral or multilateral co-production treaty. This is the most robust structure for accessing the full 60%/70% rate, since the Basque partner directly incurs the qualifying spend.

2. Pass-through / executive producer arrangement

   A non-resident producer subcontracts Basque-based production services (studios, post-production, VFX, crew) through a Basque executive producer, who claims the deduction only on the costs it directly bears. This suits international productions using the Basque Country primarily for services rather than full co-production.

3. Agrupación de Interés Económico (AIE)

   A dedicated AIE vehicle channels third-party financing into the Basque production and monetises the resulting tax credit for corporate investors — structurally similar to the Art. 39.7 LIS mechanism used in the common territory, but layered on top of the higher Basque rate.

International producers rarely have Spanish Corporate Income Tax liability of their own, which means the value of a 60%–70% Basque deduction can only be realised by bringing in a Spanish (or Basque) taxpaying counterparty. Bestard Capital arranges this bridge: identifying corporate investors — industrial groups, financial institutions, family offices with Basque or Spanish operating entities — with sufficient cuota líquida to absorb the credit, structuring the financing contract or co-production vehicle, and managing the certification and recoupment timeline from principal photography through to final tax filing.

Because the Basque deduction can now be generated and applied in the same tax periods in which payments are actually made — rather than waiting for cultural qualification — the cash-flow profile for investors is materially faster than under the common territory Art. 36 LIS regime, which remains subject to certification before the credit crystallises.

Figures illustrative of headline rates as of July 2026; each regime carries distinct territorial-spend thresholds, minimum budgets, and EU State Aid intensity ceilings that affect the amount actually recoverable in any given production.

Under the reformed Basque rules (Bizkaia from 2023, Gipuzkoa and Álava from 2024), the deduction is generated and applied in the fiscal periods in which qualifying payments are actually made — producers and financing investors no longer need to wait for the film's completion or cultural qualification before beginning to apply the credit. This is a structural improvement over the common territory regime under Art. 36 LIS, where certification by ICAA is generally required before the deduction can be applied.

In practice, a Basque-qualifying production typically sees the deduction begin accruing during principal photography, with final territorial-spend verification (confirming the 50%/35% thresholds) performed in the last tax period of the production. For investors financing through an AIE or co-production structure, this front-loaded cash-flow profile — combined with the 25%–35% cuota líquida absorption limits that typically apply — is a key structuring variable that Bestard Capital models on a case-by-case basis.

This content does not constitute individualised tax advice. Regional tax incentives are subject to change, transitional regimes and EU State Aid re-approval. Consult a qualified tax professional in the relevant jurisdiction before structuring any transaction based on the information described on this page. Bestard Capital acts as arranger/introducer and does not provide regulated financial services.

Last reviewed: July 2026