The US Unveils a Federal Film Incentive: What It Means for Filming in Spain

Since September 24, the US Congress has been considering a federal tax credit of 20% to 30% for film and TV production. The measure is not yet law, but it forces a rethink of Spain’s position in the race for major international productions. And it comes at a time when Spain’s own industry is calling for a stronger national incentive.

For decades, the United States has watched part of Hollywood’s output shoot abroad, drawn by foreign incentives. Now it wants to respond with a national tool. On September 24, 2026, a bipartisan group of senators and representatives introduced the Motion Picture, Television, and Entertainment Revitalization Act. In the Senate, the bill is led by Adam Schiff and Tim Scott, and an identical bill has been filed in the House. It arrived weeks after President Donald Trump publicly called on Congress to create a federal incentive for the industry.

What the US Federal Film Tax Credit Proposes

The bill sets a 20% base credit on production labor costs. It covers both crew and above-the-line talent such as writers, directors, producers and cast. That rate can rise in 5% increments, up to a maximum of 30%. Uplifts apply in cases such as shooting in rural areas or federally declared disaster zones, or for independent productions.

The key requirements for the international market are these:

  • A minimum spend of $1 million per film or season.
  • At least 75% of shooting days in the United States.
  • The credit would be transferable and stackable on top of state incentives.

That last point matters. California has already expanded its state program to $750 million a year. Combining both levels could place some US shoots among the most heavily incentivized in the world.

It is too early to draw conclusions. If passed, the credit would apply to productions after December 31, 2026. Its sponsors hope to include it in a tax package after the November elections. The trade press, however, considers passage in 2027 more likely.

Why It Matters for International Productions in Spain

The United States is one of the main source markets for foreign shoots in Spain. PROFILM, the association representing most Spanish companies that provide production services to international projects, presented its annual report in June:

  • In 2025, projects handled by its members invested €103.9 million in Spain, 20% less than in 2024.
  • The UK accounted for six projects, the US for four and the European Union for eight.
  • The association warns that Spain is attracting increasingly smaller projects.

Two figures need to be kept apart. Overall audiovisual production in Spain remains at record levels. A study by Olsberg SPI, commissioned by the Spain Film Commission, estimates production spend at €5.68 billion in 2025, up 45% from 2022, supporting around 68,000 full-time equivalent jobs. Recent international shoots it cites include Disney’s live-action Tangled, Amazon’s Tomb Raider series and Apple TV’s Murderbot. What has weakened is the arrival of large foreign productions, not the sector’s overall activity.

Incentives Are Not the Whole Story

The view from Spain is cautious. Speaking at the San Sebastián Film Festival, Spain Film Commission president Juan Manuel Guimeráns said a federal credit would boost production in the US. He added that this need not harm other territories, since higher demand there could push up labor and production costs. He also noted that productions rarely move for a single reason: labor costs, production costs and ease of filming all weigh in. Along the same lines, European producers at the festival’s Creative Investors’ Conference did not see the measure as a threat to the European market.

That is where Spain competes beyond the headline rate: experienced crews used to international productions, a wide variety of locations within short distances, and a well-established network of film commissions. The industry itself warns, however, that these strengths only pay off with predictable payment timelines and legal certainty. Both are among PROFILM’s top demands.

Spain Film Tax Incentives Today

Under Spain’s general tax regime, foreign productions can access the Spain tax rebate set out in Article 36.2 of the Corporate Income Tax Act. It works as follows:

  • A 30% deduction on the first €1 million spent in Spain and 25% on the remainder.
  • A cap of €20 million per production and €10 million per episode for series.
  • A minimum spend of €1 million, or €200,000 for animation.
  • The production must go through a Spanish production company registered with the ICAA, the national film agency.

Some regions offer more:

  • Canary Islands: the deduction reaches 54% on the first €1 million when spend on the islands exceeds €1.9 million, and 45% on the remainder.
  • Basque Country: the regional regimes of Bizkaia and Gipuzkoa allow deductions of up to 60%, depending on the share of spend in the territory. They make no distinction between Spanish and foreign productions.

The framework may change. In June, Spain’s draft Film and Audiovisual Culture Law cleared its first vote in Congress. Culture Minister Ernest Urtasun has announced that it will raise the incentive to the maximum allowed by the European Union, though no specific figures have been given yet. The government aims to pass the law before the end of 2026.

Other Markets Are Moving Too

The competition is not just between Spain and the US:

  • France has extended its tax rebate for international productions until 2028.
  • Mexico has passed a new film law with a credit of up to 30% of spend in the country.

For a US producer, the comparison is between entire jurisdictions, not between two countries.

What to Watch in the Coming Months

For anyone planning shoots in 2027, three issues remain open:

  • The progress of the US federal bill and whether it passes.
  • The final rate set by Spain’s new Film Law.
  • Changes in incentive payment timelines.

Meanwhile, choosing a territory within Spain — the general regime, the Canary Islands or the Basque Country — remains one of the financial decisions with the greatest impact on a production budget.

At Soul Pictures, with offices in San Sebastián and Barcelona, we provide production services in Spain for international projects and analyze the tax incentives available in each territory. If you are considering filming in Spain for your next feature film or series, get in touch with our team.