ITALIAN TAX CREDIT

FOR
FEATURE FILMS - TV MOVIES - TV SERIES

1. WHAT IS IT AND HOW IT WORKS?

The tax credit is an italian incentive introduced in 2008. It applies to all audiovisual productions: feature films, TV movies, TV & Web Series, TV dramas.
The italian tax credit allows a saving of 30% on eligible production costs.

2. DEFINITIONS

Foreign film production

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 (“MIBAC”)

Such application 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. MIBAC shall confirm if the work is eligible or not within 30 days following the date of submission of the preliminary application.

Tax credit final application to MIBAC

Such application must 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

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

4. HOW IT WORKS: THE TAX CREDIT MONTHLY OFFSETTING

THE ITALIAN PRODUCER CAN USE THE TAX CREDIT TO OFFSET TAX DEBTS, INCLUDING:

  • VAT
  • CORPORATE INCOME TAX (IRES)
  • REGIONAL INCOME TAX (IRAP)
  • SOCIAL CONTRIBUTION/FRINGES
  • TAXES WITHHELD ON LABOUR COST (IRPEF)
Once the italian producer has been notified by MIBAC that the film has passed the cultural eligibility test, 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.

5. TAX CREDIT PERCENTAGE

30%

OF THE ELIGIBLE COSTS PAID BY THE ITALIAN PRODUCER FOR EACH WORK
Production expenses on italian territory, not exceeding the 75% of the total film budget, including pre and post - production costs.
Any expenses incurred in another EU country are to be treated as expenses incurred in Italy up to a maximum of ONE-SIXTH of the 75% of the total film budget.
Up to a maximum amount of € 20M per year per company.

6. ELIGIBLE COSTS

ANY PRODUCTION EXPENSES INCURRED AND PAID BY THE ITALIAN PRODUCER

PROVIDED THAT
Financial, insurance, warranty and overheads expenses are taken into account up to a maximum of 7,5% of the production cost.
Above the line costs are taken
into account up to a maximum of
30% of the production costs.
PRODUCER FEE IS NOT AN ELEGIBLE COST

7. ADMINISTRATIVE PROCEDURE: PRELIMINARY APPLICATION

FOREIGN PRODUCER

AGREEMENT (PSA)

ITALIAN PRODUCER

TO MIBAC

(the italian ministry of culture)

SUBMIT THE ONLINE APPLICATION FORM

Feedback from MIBAC within 30 days starting from the submission date

7A. ADMINISTRATIVE PROCEDURE: HOW TO APPLY

THE APPLICATION FORM INCLUDES

The compliance of cultural eligibility requirements' test according to the established indicators.
Film total budget amount, italian budget, script, schedule, specifying the total of shooting days on italian territory or in another EU country, cast and crew list.
Official statement by the foreign producer that the film is intended primarily for theatrical release or for TV or Web broadcast.
Within 30 days from the date of receipt of the application, MIBAC notifies to the italian producer with registered letter the assessment concerning the cultural eligibility.

7B. ADMINISTRATIVE PROCEDURE

FOREIGN PRODUCTION COMPANY MUST

Countersign the preliminary application submitted by the italian producer to MIBAC
Countersign the final application submitted by the italian producer to MIBAC

7C. ADMINISTRATIVE PROCEDURE: FINAL APPLICATION

APPLICANTS MUST SUBMIT TO MIBAC THE PRESCRIBED FORMS, SIGNED ALSO BY THE FOREIGN PRODUCER, WITHIN 180 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 a certified auditor

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 MIBAC OF THE FULFILLMENT OF THE SUBJECTIVE, OBJECTIVE AND FORMAL REQUIREMENTS WITHIN 60 DAYS FROM THE DATE OF RECEIPT OF THE FINAL APPLICATION

8. CULTURAL ELIGIBILITY REQUIREMENTS

To OBTAIN the CULTURAL ELIGIBILITY OBLIGATORY QUALIFICATION the FILM MUST SCORE a MINIMUM OF 50 POINTS out of 100 POINTS among BLOCKS A and B WITH A MINIMUM SCORE OF 35 POINTS in BLOCK A

BLOCK A CONTENTS

  • A.1 - Subject/Script of the film/audiovisual work, based on an italian or european novel or theatre piece book published 5 pts
  • A.2 - Subject/Script of the film/audiovisual work, based on historical, mythological or legendary, religious, social, fantastic, artistic or cultural THEMES 30 pts
  • A.3 - Subject/Script of the film/audiovisual work, based on historical, mythological or legendary, religious, social, fantastic, artistic or cultural CHARACTER/PERSON 25 pts
  • A.4.1 - If the subject is SET (not SHOT) in Italy or in Europe for at least 15% of of the Script Scenes / A.4.2. If the subject is SHOT in EXTERIOR in Italy for at least 15% of the Script Scenes 5 pts
  • A.5 - Direct Sound Recording totally or mostly in Italian language, including linguistic minority dialects: minimum of 30% of the Script scenes. As alternative, the film should be subtitled or dubbed in Italian 5 pts

8.a CULTURAL ELIGIBILITY REQUIREMENTS

BLOCK B PRODUCTION

  • B.1 If a CREATIVE TALENT listed among the following positions -PRODUCTION DESIGNER, SET DRESSER, ART DIRECTOR, KEY M/UP Artist, COSTUME DESIGNER, DoP, LINE PRODUCER, EDITOR- is citizen of Italy or SEE (Economic European Space) 3 pts
  • B.2 Shooting on Stage/Studio in Italy a minimum of 20% of the SCRIPT INTERIOR SCENES shot in Italy Studios/Stages 5 pts
  • B.3 Digital Effects in Italy 4 pts
  • B.4 Special Effects in Italy 4 pts
  • B.5 Music Recording in Italy 3 pts
  • B.6 Sound editing and mix in Italy 3 pts
  • B.7 Post-Production Lab work in Italy 5 pts
  • B.8 Final Editing in Italy 3 pts

9. EXPENSES ON ITALIAN OR EU TERRITORY

TWO CASES

FILM 1 TOTAL BUDGET: € 10 M

€ 2,5 M

NOT ELIGIBLE COST

€ 7,5 M

SPENT IN ITALY BY THE ITALIAN PRODUCER

€ 2,25 M
TAX CREDIT
=30% of 7,5 M

FILM 1 TOTAL BUDGET: € 10 M

€ 2,5 M

NOT ELIGIBLE COST

€ 6,25 M

SPENT IN ITALY BY THE ITALIAN PRODUCER

€ 1,25 M

SPENT IN A EU COUNTRY BY THE ITALIAN PRODUCER

€ 2,25 M
TAX CREDIT
=30% of 7,5 M

THE ITALIAN TAX CREDIT IS ONE OF THE VERY FEW INCENTIVES THAT ALLOWS ACTUAL SAVINGS DURING PRODUCTION

THE TAX CREDIT CAN ALSO BE HANDED OVER BY THE ITALIAN PRODUCER TO BANKS AND THIS CAN SPEED UP THE RESIDUAL CREDIT RETURN PROCEDURE TO THE FOREIGN PRODUCER

Mestiere Cinema srl
Cannaregio
3597 30121 Venice - IT
Telefono +39 041 715658
Fax +39 041 5231741
info@mestierecinema.it
Guido Cerasuolo
Producer
guido@mestierecinema.it
Mobile +39 335 120 2120
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