The Estonian Film Institute initiated the cash rebate project Film Estonia in 2016, offering foreign film productions a cash rebate of up to 30%. Experts deemed the first pilot year to have shown twice the expected result.
"Film Estonia’s first year was very beneficial for the whole film sector here", says Edith Sepp, Head of the Estonian Film Institute (EFI). She explained that EFI expected every euro to be tripled in foreign investment, but the numbers showed that every euro spent brought back more than seven euros.
Foreign funds amounting to 1.67 million euros were invested in Estonia. The cash rebate from the pilot year was 502,000 euros. Labour taxes of 274,000 euros were paid to the state for the employment of local film crews.
The cash rebate was divided between two projects. The Finnish movie The Eternal Road with a budget of 3 million invested, and more than half of that – 1.53 million euros – to Estonia. The Danish full-length animation Hodja from Pjort had a budget of 2.2 million, spending 143,000 of that in Estonia.
Sepp notes that although the labour taxes for the crew don’t cover the sum that is being paid back to the production, it can easily exceed that amount, when indirect taxes paid back to the state are taken into consideration. "In our report, there is for example no distinction between the labour costs among rental, transport, accommodation, construction and other services, gasoline taxes and so on", explains Sepp.
Considering just the employment tax for the crews, it is safe to say that every euro invested in a foreign film production brought 7.3 euros back to Estonia. In Sepp’s words, the Film Estonia support programme has proven the usefulness and efficiency of a system that’s been in use for years in numerous European countries.
"Estonia has received foreign funding that would have found no way here otherwise. It is especially gratifying that Film Estonia has allowed Estonian crews to get some extra work", she said. "Foreign production companies have brought four new projects to our doorstep this autumn, this time from Denmark, Germany, Great Britain and Finland. These investments in Estonia already exceed 4 million euros."
Sepp expressed hope that with the cash rebate system, the high quality work of Estonian filmmakers and the new studio complex designed to be launched next year, foreign investment will increase substantially in the coming years, and Estonia will become the next small country to gain international acclaim in the field of film and TV production.
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