The MiBACT decrees have been published in its Official Journal with the implementing regulations of the tax credit framework for the cinematographic and audiovisual sector.
The total budget for the Film and Audiovisual Fund 2018 is of 400 million euros, of which €227 million have been assigned to the tax credit. The first of the two decrees released on March 15, published in MiBACT’s Official Journal on May 25, 2018, contains the provisions concerning the tax credit for film and audiovisual production companies. MiBACT (Ministry of Cultural Heritage and Activities and Tourism), together with the Ministry of Economic Development, aim to encourage investments made to produce Italian audiovisual works and is destined to independent producers. The tax credit incentives will be granted to productions according to three different categories: cinematographic or films; audiovisual material broadcasted on national TV stations to the general audience; audiovisual material published by a provider of audiovisual media services on other media. The producers will receive a tax offset equal to 30% of the expenses incurred – up to €300 thousand per year – for the development of films, TV and web works.
To receive such incentives, a request shall be sent to the Cinema General Management of MiBACT within 60 days from the final date of issuance of the expenses. Several incentives to produce cinematographic works will be destined to independent producers with the tax credit equal to 30% of the eligible cost up to €8 million per year. In those cases, the request to MiBACT’s Cinema General Management is to be sent no later than 90 days before the shooting starts. For the production of TV and web works the rate will range between 15% and 30% of the eligible cost based on the features of each work, up to €10 million a year – this request shall be forwarded no later than 90 days before the shooting starts.
The second of the two decrees, published in the Official Journal on May 25, concerns the implementing provisions concerning tax credit in the film and audiovisual sector. The decree focuses on some specific areas: distribution companies; cinemas; enhancement of the film offer, attracting foreign investment in Italy, investments from companies external to the sector.
Distribution companies. The tax credit for film and audiovisual distribution companies shall not go below15% and shall not exceed 30% (40% in the cases provided for in Article 16 of Law No. 220 of 2016) of the expenses incurred for the national and international distribution of Italian works, up to a maximum of €2 million per company or group of companies. The eligible audiovisual works are films, in relation to their distribution in Italy and abroad, and audiovisual works for TV broadcasters, as well as other audiovisual materials, in relation to their exclusive distribution abroad.
Movie theatres. The tax credit granted ranges between 40% and 20% of the eligible cost based on the works carried out in movie theatres, such as renovations, construction of new cinemas, technological upgrades, investments in historic building, etc. The tax credit authorized shall not exceed €2 million per year for each company or group of companies, and each cinematographic firm must submit a prior request to the Cinema General Management no later than 120 days before the works begin.
Enhancement of the film offer. The tax credit granted for enhancing the film offer and in particular the programming of audiovisual works from Italy or other countries European Union will add up to 20% of the revenues. The decree does not specify a time limit for submitting these applications to the Cinema General Management, which before 30 of receiving the applications shall inform the applicants whether they have been granted said tax credit.
Attracting foreign investment in Italy. The tax credit will be granted to executive and post-production companies ranging between 25% and 30% of the expenses incurred in the Italian territory for the production of cinematographic, TV, web works, or parts of them, without requiring the Italian nationality or using Italian staff, commissioned by foreign productions. The tax credit will be granted within a maximum annual limit of €20 million.
Investments from companies external to the sector. The last tax credit will be recognized as a percentage of the cash contribution made to produce cinematographic works by associated external companies participating in film production companies. The benefit will be distributed in a first phase up to 30% of the cash contributions made as risk investments for the production of Italian feature films, up to one million euros per company annually and 2 million of euros per group of companies. From the 1st of January 2020, however, the tax credit will decrease to 20%.
