KFTV's Film & TV Finance Magazine - page 18-19

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g u i d e t o f i l m & t v f i n a n c e
w i t h t h e n e t h e r l a n d s f i l m f u n d & n e t h e r l a n d s f i l m c omm i s s i o n
w i t h t h e n e t h e r l a n d s f i l m f u n d & n e t h e r l a n d s f i l m c omm i s s i o n
K F T V
g u i d e t o f i l m & t v f i n a n c e 
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i n c e n t i v e h o t s p o t s
i n c e n t i v e h o t s p o t s
Germany
Bridge Of Spies
The German film industry has boomed since the
introduction of the German Federal Film Fund (DFFF).
Launched in 2007, the DFFF offers grants of up to 20%
of approved costs to producers who spend at least 25%
of their budget in Germany. Since its formation, it has
supported more than 800 projects with grants approaching
€500m. Alongside this central fund, a number of Germany’s regional governments offer financial
incentives. The biggest of these is the Film-und Medienstiftung NRW, which operates out of North
Rhine-Westphalia (the region around Cologne). But there is also strong support for production in
Bavaria and the area around the capital, Berlin. A big beneficiary of the German boom has been
Potsdam-based Studio Babelsberg, which has hosted numerous movies recently including The
Grand Budapest Hotel and The Book Thief. It was also involved in Steven Spielberg’s cold war spy
thriller Bridge Of Spies, which shot in the Berlin area during 2014.
Malaysia
Indian Summers
Channel 4’s critically-acclaimed period drama Indian Summers used the
Malaysian island of Penang, doubling for Simla in India. Key logistical reasons for
not filming in India included the fact that Simla has become very built up in recent years
and doesn’t really resemble the 1930s hill station that the features in the series. The weather
was also expected to be a problem. Penang offered the right look for the series, but was a risk
because of the lack of experienced crew in the area and the difficulty of getting the production
team up to the chosen location. However a lot of training was done on the job, with local crews
proving very willing to learn. A key factor that clinched the six-month shoot for Malaysia was the
fact that the country recently-introduced a 30% production incentive. Other productions to have
taken advantage of this include Marco Polo, produced by The Weinstein Company for Netflix.
The incentive was introduced by the Malaysian Government in 2013. Entitled the Film in Malaysia
Incentive (FIMI), it is intended to “encourage production works and increase skill sets that would
be of international standard (making) Malaysia a preferred destination and film production hub”.
FIMI is a 30% cash rebate on all Qualifying Malaysian Production Expenditure (QMPE).
Mexico
Texas Rising
Mexico has an excellent production
infrastructure that can be utilised at a lower
cost than the US. In addition it offers two
forms of filming incentive – introduced in
2010. The first is exemption from VAT. The
second is the Proaudiovisual Fund, which
grants an incentive of up to 7.5% on eligible
expenses incurred and invoiced in Mexico.
The minimum spend to be eligible is $3.125m
in production (principal photography) or
$780,000 in post-production. Combined with
low labour costs and the VAT exemption this
makes Mexico a viable filming location.
South Africa
The incentive is “intended to encourage and attract large-
budget films and television productions and post-production
work that will contribute towards employment creation,
enhancement of South Africa’s international profile, and
increase the country’s creative and technical skills base.”
The regime for film and television production incentives
was revised in March 2012 and now centres on a 20% tax
reduction on production expenditure for foreign productions filmed in South Africa with a budget
of R12m (about $1.3m) or above. This rises to 22.5%-25% reduction if filming and post-production
take place in South Africa. Post-production expenditure must be R1.5m (about $166,000) or above.
There is also a South African Film and Television Production and Co-Production Incentive which
provides a rebate of 35% for the first R6m ($662 000) spent, and 25% for the remainder.
Italy
Ben Hur
An MGM-Paramount reboot of Ben Hur was
shot in Rome’s iconic Cinecittà studios during
the first part of 2015. Ancient Jerusalem was
built on a Cinecittà backlot for the film, which
is due to be released in 2016. Ben Hur is part
of an Italian production revival that has been
made possible by the introduction of a 25%
national tax credit. Other regions to benefit
include Apulia in the south of the country,
where the national incentive has been backed
by a local production fund. Recent credits
include the movie Walking on Sunshine.
One other additional point to note about the
national tax incentive is that the cap on the
amount an international production can claim
has been raised from €5m to €10m. This
increase is helping to bring big international
productions back to Cinecittà.
United Kingdom
woman in gold
The UK is the major production hub in Europe,
recently hosting Helen Mirren movie Woman
In Gold. A major reason for its success is a
strong tax relief system, which was improved
again on April 1, 2014. From that date, the
rate of tax relief for films with a qualifying
budget of £20m or over was increased from
20% to 25% of the first £20m of qualifying
UK expenditure, with any excess qualifying
UK expenditure still receiving a 20% tax
credit. There has also been a reduction in the
minimum UK spend threshold to 10% from
25%. Also important was the decision to
relax the cultural test that calculates which
productions are eligible for support. The
decision provided a particular boost to the
film VFX industry.
The UK also has
regional funding
sources. There
is an attractive
Yorkshire Film Fund,
significant financial
support from Northern
Ireland and a
new production
fund backed
by the government in
Wales. Also read about
the West Midlands
Production Fund in this
Guide on page 14.
US States
New Mexico has hosted productions such
as Transformers, The Lone Ranger, The Host
and AMC’s acclaimed drama series Breaking
Bad. It offers a 25% or 30% Refundable
Film Production Tax Credit that also covers
post-production services rendered in New
Mexico. Louisiana is also popular thanks to a
30% tax credit on qualified direct production
expenditures made within Louisiana. There’s
also an additional 5% tax credit for payroll
expenditures to Louisiana residents. New
York’s 30% fully refundable tax credit has
been a big draw while Texas has recently
increased the size of its incentive fund
threefold. California, anxious about runaway
production, has been fighting back. In August
2014, California Gov. Jerry Brown agreed to
triple funding for California’s film and TV tax
credit programme. Under the new framework,
the state will allocate $330m a year to tax
credit funding over the next five years, up from
$100m. The increase came about because the
$100m fund was regularly over-subscribed,
forcing filmmakers to go to other states if they
did not secure support from the state.
indian summers
…continued from page 4
Ben Hur is part of an
Italian production
revival that has been
made possible by the
introduction of a 25%
national tax credit.
Combined with low labour
costs and the VAT exemption
this makes Mexico a viable
filming location.
woman in gold
texas
rising
ben hur
bridge of spies
A key factor that clinched
the six-month shoot
for Malaysia was the
fact that the country
recently-introduced a 30%
production incentive.
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