Canada’s Conservative Government to Implement Proposed Tax Relief
A Bag Full of Tricks: Government Disappoints Bay Street

Update on Foreign Film Tax Incentives

Picture_of_tax_wordIn the United States more and more jurisdictions are offering tax credits as an incentive for film producers to remain closer to home.  Although many of these incentives offer generous tax credits of up to 50% of production costs, the programs also limit the level of funding the credit would apply to amounts significantly lower than available in foreign jurisdictions such as Canada.  For many producers the cap is seen as counter-intuitive so they continue to rely on tax credits programs of other locales that provide more flexibility and benefits for higher priced productions.

Australia continues to offer a 100% tax deduction for investors in films substantially made within its borders.  On the state level producers can also access additional deductions ranging from 1.5% to 2% based on the size of the project.  Aussie productions where at least 70% of the budget is spent in Australia are eligible for a 12.5% rebate based on a budget between A$15million and A$38million.  Any production that exceeds this budget range is automatically eligible for the rebate.

In Canada, the federal government offers a production services credit of 16% based on wages paid to Canadian residents.  This rate applies to foreign owned production companies.  Some Canadian provinces also offer incentives for local productions. For example, Ontario offers an 18% tax credit based on the use of eligible labour.  Unlike some of the other provinces, Ontario does not provide a maximum claim limit.  However to be eligible for the credit, the budget cannot be less than $1 million.  Where the production company is a Canadian controlled corporation the province provides a 30% tax credit based on the use of eligible labour.  If certain conditions are met, an emerging producer can claim a credit of up to 40%.

In Germany, production companies that partner with a German producer are eligible for interest free loans that are conditionally repayable.  The amount of the loan ranges from $320,000 to $1.27 million.  To be eligible for the loan the producer must personally contribute at least 15% of the budget. 

If filming in Ireland, a foreign producer can take advantage of a 12% tax break based on the value of the budget up to $18 million.  For film budgets north of $18 million the amount that can be claimed increases to 18% to a maximum of $42 million.  Eligibility for this incentive requires the employment of at least one Irish co-producer.

The United Kingdom introduced a new tax credit program in April 2006 that superseded the sale-leaseback incentive.  Productions filmed in the UK are eligible for a 20% tax credit for budgets up to £20 million.  Films with budgets higher than £20 million only claim a tax credit of 16%.  Productions must meet additional British Cultural standards.

Copyright ©


Feed You can follow this conversation by subscribing to the comment feed for this post.

The comments to this entry are closed.