Russia launches 40% rebate for international productions

The law came into effect this week, designed to make Russia a filmmaking hub.

By Geoffrey Macnab 11 Nov 2019

Russia launches 40% rebate for international productions

Amid signs of a new, Glasnost-like desire to engage with the international industry, Russia has launched a 40% cash rebate for foreign film productions.

The rebate, signed into law earlier this week by prime minister Dmitry Medvedev, will be available immediately with around $1m allocated for the incentive this year, $11.7m for 2020 and $23.5m for 2021.

Russian producers have already received requests from foreign partners to provide production services and come aboard international projects as co-production partners.

“The launch of the rebates will allow the Russian film industry not only to integrate into the world film economy, but also become a major new hub for international film production. For us, it’s not only the conditions to shoot more films in Russia, but also a chance to show Russia the way it has not been seen abroad before,” Pavel Stepanov, deputy minister of culture in Russia, told Screen.

Russian attendees at the AFM have given the new measure an enthusiastic welcome while acknowledging some grey areas remain regarding issues such as VAT and visas.

“It is definitely positive news because it brings more opportunities,” said producer Mila Rozanova, also manager of international sales at Mars Media. “We have a good production infrastructure that has been tested already on local projects. We have a lot of young professionals who are English speaking and adaptable for international productions but we have never had the tools to attract international partners.”

“I think it is going to be quite practical, because the rebate has been prepared with the participation of producers and well discussed by the experts,” agreed Artem Vasiliev, boss of Metra Films and producer of films including Dovlatov and Anna’s War.

Rozanova added that “with this rebate system, our partners can see the government is behind the film industry. The government asked the producers for our opinion and advice. All the members of the industry contributed to this document.”

“It is good news but it will take time to make it more clear how [the rebate] works in reality,” commented Katya Mtsitouridze, head of Russian film body Roskino.

Speaking at AFM, Russian observers said they did not expect censorship issues to affect the use of the rebate. Through the scheme, producers can access reimbursements on eligible expenses which include travel, consular fees, employment of local professionals and film stage rentals.

The rebate (selective not automatic) has been created and will be supervised by the Russian Ministry of Economic Development. It will be operated by the state-owned Russian Export Center. Applications will be assessed by an “expert board” of candidates nominated by the Ministry of Culture.

Feature films and TV series must spend at least RUB15m (approximately $235,000) to be eligible for the rebate. Documentaries have a smaller threshold of $59,000 while animation is at around $78,500.

The rebate is set at 30% of the estimated amount of expenses in the Russian Federation but this can rise to 40% for films which hit certain targets, for example productions which shoot 19 days in the Russian Federation or spend RUB75m ($1.2m) in the Russian Federation or have 80% Russian crew.

The news of the rebate comes as Russian companies are attending the AFM in record numbers. Among the companies with new projects in the market are Art Pictures Studios, Central Partnership, Mars Media, Planeta Inform, Russian World Media and All Media.

“Finally, there is the understanding that films and film production can be an economically feasible export product,” commented Evgenia Markova, director of industry relations at Russia’s Expocontent.

Rodnyansky predicts uplift

Leading producer Alexander Rodnyansky (Loveless), who is due to appear on an AFM panel on November 10, ’Producing in Russia: navigating international co-productions from IP to delivery’, expressed postive sentiments about the announcement.

“Recently almost every international production ignored Russia as a filming location, preferring Budapest or Kiev,” he said. ”Hopefully the rebates might finally change this trend. Budapest, in all honesty, looks nothing like Moscow and it would be great to see international filmmakers returning to Russia where they can find not only authentic locations, but top-level production crews.”

Rodnyansky cited his own 2013 feature Devil’s Pass, directed by Renny Harlin, as an example of a Russian-shot project on which Russians collaborated successfully with international partners.

“One of the obvious issues for international productions is the fact that rebates will not be provided to them directly, but rather through associated Russian companies, but I believe that it gives a chance to many Russian companies to step up and help international companies by becoming their production partners,” he commented, predicting that wrinkles in the system will be ironed out “further down the line”.

Main image: Eva Gerr, Milan Maric. Source: SAGA

This article originally appeared on sister website, ScreenDaily

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