New tax incentive inspired by other European countries
In an effort to attract producers, the German government has adopted a new tax incentive system. Minister for Culture Bernd Neumann yesterday revealed that the sum paid by the state is to increase to €60m per year which, in addition to financing tax breaks, would allow for the creation of new funding systems.
The new tax incentive – directly inspired by reforms implemented in the UK in April – consists of a 15%-20% reduction in costs in Germany per production. The law will take effect as of January 1, 2007.
The government has promised it will ensure that the new system is applied in a way that benefits small and mid-sized production outfits and alleviates difficulties faced by several talented directors, who are often forced to produce their own films under difficult conditions.
The incentive only takes into account real production costs, sums that are directly necessary on an artistic level. These measures – which should result in an increase in profits for major foreign productions – are also expected to benefit all German directors.
The government has also asked for a task group to be created, directed by Minister Neumann, to study the French system. French tax incentives have successfully brought about "real funding for cinema", with capital coming from private investors.
(Translated from French)
Did you enjoy reading this article? Please subscribe to our newsletter to receive more stories like this directly in your inbox.
