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Money For Nothing: Why the whole planet is competing to attract film & television productions.
Good article. But the comments have to make you laugh. Funny that no one from the US or the UK understands that tax credits and rebates are not the same thing. The tax credits in California go unused most of the time and can’t be traded or transferred. Only a few companies really befit from them. Everyone in LA calls the subsidies in Greece, Spain and Italy “tax credits”. Every accountant, lawyer and investor out there understands the difference. This makes investors really nervous when the professionals in media don’t know what they are talking about, or at best are using words incorrectly.
I don’t see the tax credits as important at all to anyone but the big public companies in this space. That all seems like politics to me. The real impact on spending in a cottage industry is the rebates being offered in places like Italy and Spain. Why would any indie film maker not go to where 30 or 40% of their budget spend gets paid back to them as contract revenue 18 months later. That’s revenue! And you can borrow against it as almost zero risk to the lender? LA is doomed.
Interesting comment Gavin. Does Section 181c not provide some sort of support for the industry?
some of the US state tax credits are losing their attractiveness due to the excessive time it takes to claim them (ie up to 7 years now in NY), and their unreliability, while new tax credits are springing up in places like Greece and Italy which are becoming very attractive. That said, London is still best for crews and facilities, and as you say, the U.K. tax credit works very well. You also left out Canada, a major player in service production.
Gavin. What tax credits do you mean for Greece? I found their tax credits to be nothing much compared to their rebates. 35% on local spend, and guaranteed by the Government. Italy is going to 40% I think, but they also offer few credits against tax liabilities; some for R&D I think. We have to set up a local Greek company for some of the expenditure, but that is not where the IP or the license fees are. Am I missing something?