Spain has adopted new rules and regulations for Netflix, Amazon Prime Video, HBO, among other streaming companies to operate in its country. They will have to pay a 5% revenue tax in Spain to finance European TV series and movies.
The Spanish Administration is amending its TV laws with a new Ley General de Comunicación Audiovisual that will oblige global streamers to finance European productions at the same level as RTVE (the state-owned public corporation) and private TV broadcasters. Out of the 5%, 70% of tariff will go to independent producers who must produce up to 40% of their output in Spanish (Castilian) or other official languages in the country such as Catalonian, Galician, Valencian or Euskera.
All streaming platforms will have to follow the rules except for those with revenues below €10 million in the Spanish market. Those with revenues lower €50 million will be entitled to acquire “exploitation rights of already finished audiovisual TV content”. These platforms have to be registered, provide information about the number of subscribers and their fees in Spain, with data to be managed by the CNMC – Comisión Nacional de los Mercados y la Competencia (The national commission and marketing and competition). This is key as most US streaming platforms only report a minimum percentage of their revenues in the country, and divert their revenues to other countries with tax shelters. For example, in its first fiscal year 2018 in Spain, Netflix only reported €540,000 sales, paying just €3,146 in taxes.
According to the consultancy firm Comparitech, cited by El País, Netflix had 3.4 million Spanish subscribers at the end of the first quarter this year, generating €106 million in revenues. Now with the new law, the tax calculation will be made over “real revenues, not on fiscal reports”.
With this measure, popularly known as ‘Netflix tax’, streaming platforms will operate under the same legal conditions and with the same obligations as Mediaset, Atresmedia, and telco operators – Movistar, Vodafone, Orange – which are legally bound to finance Spanish cinema and the public broadcaster RTVE.
The amendment is a transposition of the European directive approved in 2018 and already applied in Germany, Denmark and Sweden – the first countries to adopt it. The platforms will now have until December 3rd to adhere to the new ruling.
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