ITALIAN TAX CREDIT

FOR
FEATURE FILMS - TV MOVIES - TV SERIES

1. WHAT IS IT

The tax credit is an italian incentive introduced in 2008 for foreign feature films. Since 2014 this tax benefit also applies to tv productions tv movies, tv series and dramas.
It allows a saving of 25% on production costs paid by the italian producer.

2. DEFINITIONS

Foreign films TV Movies TV Series

Production which has not received an italian nationality assessment.

Benificiary

Italian executive producer/ Production service company taxable in Italy, and able to offset tax debts. The italian producer must be registered in the film industry lists established and kept by the directorate-general for cinema, on commission by foreign production companies.

Foreign film production company

Company which does not have a registered office, fiscal domicile or permanent establishment in Italy and does not have taxable income in Italy.

3. HOW TO GET IT

Tax credit preliminary application to the italian ministry of culture (MIBACT)

Such is to be submitted by the italian producer (and countersigned by the foreign producer). The actual use of the tax Credit is conditional upon this application.

Cultural eligibility test

The test is a part of preliminary application. Mibact shall confirm if the work is eligible or not within 60 days following the date of submission of the preliminary application.

Tax credit final application to MIBACT

Such is to be submitted by the italian producer (and countersigned by the foreign producer). Together with a description of the costs incurred by the italian producer certified by an indipendent chartered accountant.

Tax credit final amount

MIBACT shall confirm the final amount of the tax credit accrued by the eligible work within 60 days following the date of submission of the final application.

4. HOW DOES IT WORK THE TAX CREDIT MONTHLY OFFSETTING

THROUGH THE ITALIAN PRODUCER THE TAX CREDIT CAN BE USED TO OFFSET ANY TAX DEBT

INCLUDING

VAT - CORPORATE INCOME TAX (IRES) - REGIONAL INCOME TAX (IRAP) - SOCIAL CONTRIBUTION - TAXES WITHHELD ON LABOUR COST (IRPEF)

5. TAX CREDIT PERCENTAGE

25%

OF THE ELIGIBLE COSTS PAID BY THE ITALIAN PRODUCER FOR EACH WORK
Production expenses on italian territory, not exceeding the 60% of the total budget.
Any expenses incurred in another EU country are to be treated as expenses incurred in Italy up to a maximum of 30% of the overall film production budget.
Up to maximum amount of € 10M for each work

6. ELIGIBLE COSTS

ANY PRODUCTION EXPENSES INCURRED AND PAID BY THE ITALIAN PRODUCER

PROVIDED THAT
Financial, insurance and warranty expenses are taken into account up to a maximum of 7,5% of the production cost.
Overheads are taken
into account up to a maximum of 7,5%
of the production cost.

THE TAX CREDIT CAN BE OFFSET ON A MONTHLY BASIS ON THE CONDITION THAT EXPENSES ARE ACCRUED AND PAID BEFORE THE END OF THE MONTH PREVIOUS TO THE COMPENSATION

PRODUCER FEE NOT INCLUDED

7. ADMINISTRATIVE PROCEDURE: PRELIMINARY REQUEST

FOREIGN PRODUCER

ITALIAN PRODUCER

TO THE ITALIAN REVENUE AGENCY “AGENZIA DELLE ENTRATE”

Eletronic data transmission of the declaration of fulfillment of the “Daggendorf Clause” requirements.

TO MIBACT (THE ITALIAN MINISTRY OF CULTURE)

Submit the online application form.

7A. ADMINISTRATIVE PROCEDURE: HOW TO APPLY

THE APPLICATION FORM INCLUDES

The certification of the compliance of cultural eligibility requirement, according to the established indicators.
Film production total budget amount, script, schedule, specifying the total of shooting days on italian territory or in another EU country.
Official statement by the foreign producer that the film is intended primarily for theatrical release or for TV broadcast.
WITHIN THE END OF THE MONTH FOLLOWING THE DATE OF RECEIPT OF THE APPLICATION, MIBACT NOTIFIES WITH REGISTERED LETTER WITH ADVICE OF RECEIPT THE PROVISIONAL NEGATIVE ASSESSMENT CONCERNING CULTURAL ELIGIBILITY. THE APPLICANT CAN FURTHER APPLY ONLY ONCE FOR THE SAME FILM WORK. IN ABSENCE OF ANY COMMUNICATION, THE NOTIFICATION OF A POSITIVE ASSESSMENT WILL BE EXPRESSED BY THE SO-CALLED “TACIT APPROVAL”.

7B. ADMINISTRATIVE PROCEDURE

FOREIGN PRODUCTION COMPANY MUST

COUNTERSIGN THE PRELIMINARY APPLICATION SUBMITTED BY THE ITALIAN PRODUCER TO MIBACT AND ASCERTAIN THE ACHIEVEMENT OF A POSITIVE ASSESSMENT

FOLLOW THE ITALIAN PRODUCER MONTHLY OFFSETTING OF TAX DEBTS, SUCH AS LOCAL VAT, CORPORATE INCOME TAX, REGIONAL INCOME TAX, SOCIAL CONTRIBUTION, ETC.
COUNTERSIGN THE FINAL APPLICATION SUBMITTED BY THE ITALIAN PRODUCER TO MIBACT AND ASCERTAIN THE ACHIEVEMENT OF THE FINAL AUTHORIZATION

7C. ADMINISTRATIVE PROCEDURE: FINAL REQUEST

APPLICANTS HAVE TO SUBMIT TO MIBACT THE PRESCRIBED FORMS, ALSO SIGNED BY THE FOREIGN PRODUCER, WITHIN 30 DAYS FROM THE END OF THE ITALIAN PRODUCER ACTIVITIES.
ON THE APPLICATION THE FOLLOWING MUST BE SPECIFIED:

1
OVERALL FILM PRODUCTION COSTS, WITH A CERTIFICATION OF ACTUAL EXPENSES ACCRUED, ENACTED BY THE PRESIDENT OF THE BOARD OF AUDITORS, AN AUDITOR OR A PRACTITIONER OF A PROFESSIONAL REGISTERED ASSOCIATION, OR BY THE OFFICER IN CHARGE OF THE TAX ASSISTANCE CENTRE

2
THE ENTIRE AMOUNT OF THE PRODUCTION COSTS ON ITALIAN TERRITORY, AS WELL AS OTHER EXPENSES IN OTHER EU COUNTRIES

3
THE AMOUNT OF THE TAX CREDIT TO BE GRANTED TO THE ITALIAN PRODUCER SPECIFYING THE AMOUNT OF TAX CREDIT ALREADY USED, AS WELL AS THE MONTH IN WHICH ENTITLEMENT TO TAX CREDIT FIRST AROSE

THE TAX CREDIT BENEFITS ARE ASSIGNED AFTER AN EVALUATION BY MIBACT OF THE FULFILLMENT OF THE SUBJECTIVE, OBJECTIVE AND FORMAL REQUIREMENTS WITHIN 60 DAYS FROM THE DATE OF RECEIPT OF THE APPLICATION

8. THE CULTURAL ELIGIBILITY TEST

APPLYING WORKS HAVE TO PASS AN ELIGIBILITY TEST AIMED AT GUARANTEEING THEIR ITALIAN OR EUROPEAN CULTURAL IDENTITY MINIMUM TOTAL SCORE 50/100 POINTS AMONG BLOCK A - B - C

BLOCK A CONTENT

  • SCRIPT ADAPTED FROM LITERARY WORK 10 pts
  • SCRIPT CONCERNING HISTORICAL, LEGENDARY, RELIGIOUS, SOCIAL, ARTISTIC OR CULTURAL EVENT 10 pts
  • SCRIPT CONCERNING A CELEBRITY OF HISTORICAL, LEGENDARY, RELIGIOUS, SOCIAL, ARTISTIC OR CULTURAL IMPORTANCE 10 pts
  • ITALIAN OR EUROPEAN MAIN CHARACTERS OF THE SCRIPT OR OF THE SCREENPLAY 10 (4,6) pts
  • SCRIPT SET IN ITALY OR IN A EU COUNTRY, OR EXTERIORS SHOT IN ITALY WITH THE AIM OF VALUING ARTISTIC, ARCHEOLOGICAL AND ARCHITECTURAL ASSETS (MINIMUM THRESHOLD 15% OF THE SCENES) 15 (6) pts
  • ORIGINAL DIALOGUE RECORDED, POST-SYNC OR SUBTITLED IN ITALIAN OR ITALIAN DIALECT (MINIMUM THRESHOLD 50% OF THE SCENES) 5 pts

PLEASE NOTE THAT IN THIS BLOCK A, 2 OUT OF 4 OF THE UNDERLINED ITEMS ARE COMPULSORY

BLOCK B CREATIVE TALENTS

  • PRESENCE OF A FILMMAKER EU CITIZEN (PRODUCER, DIRECTOR, SCRIPTWRITER, COMPOSER) 8 pts
  • PRESENCE OF A CREATIVE TALENT EU CITIZEN (PRODUCTION DESIGNER, ART DIRECTOR, KEY MAKE-UP ARTIST, COSTUME DESIGNER, D.O.P., LINE PRODUCER, EDITOR, SET DESIGNER) 8 pts
  • PRESENCE OF AT LEAST ONE LEADING ACTOR EU CITIZEN 2 pts
  • PRESENCE OF AT LEAST 2 SUPPORTING ACTORS EU CITIZEN 2 pts

BLOCK C PRODUCTION

  • SCENES SHOT AT A STUDIO IN ITALY 8 (4) pts
  • DIGITAL EFFECTS IN ITALY 2 pts
  • MUSIC RECORDING IN ITALY 2 pts
  • SOUND EDITING AND MIXING IN ITALY 2 pts
  • LABOR WORK IN ITALY 2 pts
  • FINAL EDITING IN ITALY 2 pts

9. EXPENSES ON ITALIAN OR EU TERRITORY

TWO CASES

FILM 1 TOTAL BUDGET: € 10 M

€ 4 M

NOT ELIGIBLE COST

€ 6 M

SPENT IN ITALY BY THE ITALIAN PRODUCER

€ 1,5 M
TAX CREDIT
=25% of 6 M

FILM 1 TOTAL BUDGET: € 10 M

€ 4 M

NOT ELIGIBLE COST

€ 3 M

SPENT IN ITALY BY THE ITALIAN PRODUCER

€ 3 M

SPENT IN A EU COUNTRY BY THE ITALIAN PRODUCER

€ 1,5 M
TAX CREDIT
=25% of 6 M

10. MAIN CONCLUSIONS

GO ALWAYS FOR THE TAX CREDIT FOR FOREIGN FILMS - TV MOVIES - TV SERIES

IF

THE FILM IS NOT ELIGIBLE FOR ITALIAN NATIONALITY

IF THE LOCAL EXPENDITURE IN ITALY IS 60% OF THE BUDGET

(INCLUDING A MAXIMUM 30% OF THE BUDGET SPENT IN OTHER EU COUNTRIES)

Mestiere Cinema srl
Cannaregio
3597 30121 Venice - IT
Telefono +39 041 715658
Fax +39 041 5231741
info@mestierecinema.it
Enrico Ballarin
Producer
enrico@mestierecinema.it
Mobile +39 335 120 2119
Simonetta di Fresco
Production Mgr
simonetta@mestierecinema.it
Mobile +39 337 509 497

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Mestiere Cinema srl

Cannaregio 3597
30121 Venice, Italy

Ph. +39 041 715658
Fax +39 041 5231741

info@mestierecinema.it
VAT IT02655420277