Tax Credit

FAQs

Two measures may be of interest for foreign producers: the “Tax Credit” aimed at Italian executive producers for foreign films and the “Tax Credit” aimed at Italian Producers for national films or coproductions.  Tax measures are meant to optimise and support film production activities also through joint projects involving Italian and foreign production companies that choose to film all or a part of their projects in Italian territory.
The system for making the tools available to foreign producers who choose to film in our regions has recently been enhanced by the extension of tax credits to the entire audiovisual production chain, including – along with theatrical movies – products for television and web, whether they be dramas, animations or documentaries.

The benefits are grant to italian line producers who set up agreements with international companies intending to locate part of their foreign film-making on Italian soil. The upper limit for this type of support has been doubled from 5 to 10 million Euros, the rate is the 25 % of eligibile costs and the main condition are: italian expenses must not exceed the 60 % of budget and the expenses in other UE countries are eligibile up to 30% of the budget.

In practical terms, even if the Italian executive producer is the only one who can claim to the Ministry of Culture for the benefit, the foreign producer will transfer to the Italian company a sum equal to the total Italian cost less the fiscal benefit accrued. Under a financial perspective, the benefit works as a cash provision granted during the production: that is because the Italian line producer can offset the accrued tax credit against his tax debts on a monthly basis.

Does the tax incentive function as a credit or a rebate?
As a credit (regarding foreign films)

What qualifications are required to be eligible for the tax incentive? What are the qualifying expenditures?
All categories of film must pass a “cultural” test to meet the EU requirement for State aid.
The main conditions for foreign films are: italian expenses must not exceed 60% of budget. The eligible costs are: production costs up to the master copy (excluding any distribution cost)financial and insurance expenses: maximum 7,5% of the Production Cost; Production staff costs, net of social security contribution, not higher than 25% of total cost. Overhead expenses (staff and location not involved in the production) eligible in the percentage corresponding to the ratio between number of shooting days and annual days and, in any case, up to a maximum amount of 7,5% of the Production Costs.

Does the tax incentive just apply to below the line positions, or would it cover above the line as well?
Overhead expenses (staff and location not involved in the production) eligible in the percentage corresponding to the ratio between number of shooting days and annual days and, in any case, up to a  maximum amount of 7,5% of the Production Costs.

Is there an annual cap on the amount awarded under the incentive program? Is there a cap on the amount that can be awarded to a specific project, or a compensation cap of any sort?
The maximum cap for foreign film is 10 million of euros, no annual cap for foreign films.

Can you please let me know what other films have been shot in Italy and benefited from the tax incentive recently?
The face of an angel by M. Winterbottom, To Rome with love by W. Allen, Effie by R. Laxton, Aprés mai by Olivier Assayas, Nine by R. Marshall, Letters to Juliet by G. Winich.

What is the typical timeline once the credit is applied for?
60 days following the date of submission of the final application

 

For further information you can visit:
Filming in Italy_tax incentives supporting film productions