EU approves Czech film tax incentives

By Irena Zemanová

The European Union approved a Czech film tax incentive, announced by the Czech government on Firday, June 18. The proposal, which was approved in October 2009 by the Czech government, allows foreign productions a rebate of up to 20% of the amount spent in the country. The Czech Ministry of Culture (www.mkcr.cz) has budgeted CZK 400 million (16 million euros) for rebates in 2010 and has been awaiting the EU decision since January.

The Czech Ministry of Culture declined to comment the details as the information is still "informal" at the moment.

"We haven't received the official resolution from the European Commission yet, we are expecting the documentation on it within days. After that, we will confirm and comment on the film incentives details immediately, including the date the film incentive system programme will start officially," Helena Fraňková, head of the media and audiovisual department of the Czech ministry of Culture, said on Friday.

According to Petr Mošna, head of the Czech Film Chamber ( www.filmovakomora.cz ), this is a major breakthrough for the Czech film industry. "With the planned budget of CZK 400 million, the Czech Ministry of Culture has already prepared film incentives for the amount of CZK 2 billion in foreign investments spent in the Czech Republic. It's more than triple the amount spent by the foreign productions in the Czech Republic in 2009," Mošna said on Friday in a short interview with Czech public radio Český rohlas (www.rozhlas.cz), which is governed by public law.

Film studios will be among the biggest beneficiaries of the new film incentives, with the effects of the approval having an immediate impact. Jan Macola, head of coproductions and development as Barrandov Studios, told FNE, "For Barrandov Studios this news is very important. It means that we are almost fully booked until the end of 2010. Two big projects have confirmed that were waiting for the approval of this law. It makes the Czech Republic a much more attractive place for foreign producers. The law is based on the German model and it includes both film and TV productions. For us the inclusion of TV productions is also quite important."

"We are very happy with the decision of the European Comission, however I have no more details on the final resolution of the EU. We still hope that the film incentive system approved by the czech government will attract Hollywood filmmakers back to the Czech Republic," said Pavel Strnad, head of the Czech Audiovisual Producer´s Association APA (www.asociaceproducentu.cz ) and leading Czech production company Negativ (www.negativ.cz ).

In 2003, Hollywood and European filmmakers spent more than 5 bilion crowns in the Czech Republic. In 2008, the amount of the foreign investments dropped to only CZK 700 million as Hollywood production move to Hungary, Romania, Bulgaria, and the Ukraine, driven away by the Czech Republic's lack of tax incentives.

In numerous European countries and American states, Hollywood filmmakers can expect a rebate of up to 20% of every euro spent in that territory.

"We love the Czech Republic for its exteriors and its filmmakers. But the problem of tax incentives becomes more and more important for every big Hollywood production, including Narnia," Mark Johnson, executive producer of The Chronicles of Narnia: Prince Caspian, told FNE in 2008. Walt Disney´s $200 million film, produced in New Zealand, Slovenia, and the Czech Republic in 2007-2008, was one of the last big budget Hollywood productions shot in the Czech Republic.