Film Production in Hungary: Unlocking Potential with the 30% Tax Rebate
Seize the Scene: Maximize Your Film's Budget in Hungary
Nov 27, 2024
Hungary has long been a destination of choice for filmmakers globally, offering picturesque locations and a highly skilled production workforce. Adding to its appeal is the Hungarian film incentive, a lucrative 30% tax rebate that significantly lowers production costs and makes Hungary even more attractive for both local and international filmmakers. This incentive is part of a broader film support program approved by the European Commission, designed to stimulate creative outputs and economic activity within the country.
About the 30% Tax Rebate
The Hungarian tax rebate system is straightforward yet generous, offering a 30% rebate on all eligible Hungarian spend. Interestingly, up to 25% of the eligible expenditure can be non-Hungarian but must still qualify for the 30% rebate. This flexibility allows producers to maximize their savings while employing resources both within and outside Hungary. The rebate itself is a non-recourse, non-repayable, and non-recoupable cash rebate provided by local corporate taxpayers, ensuring that filmmakers receive tangible financial benefits promptly.
Eligibility and Types of Productions
The rebate covers a wide array of production types, including:
Service Works: Utilizing a registered Hungarian film production service company.
Co-productions: Both European and other international projects with financial and/or creative participation of a Hungarian co-producer.
Hungarian Films: Fully local productions aiming to showcase Hungarian culture and talent.
All eligible films must pass a cultural test, similar to other European cultural assessments, ensuring that they contribute culturally to the Hungarian and European cinema landscape. Moreover, the rebate system is inclusive, accommodating feature films, animations, documentaries, experimental works, TV-films, and mini-series without restrictions on minimum cost, theatrical screening, or completion/delivery requirements.
Registration and Application Process
To tap into this incentive, the process begins with registering the film at the National Film Office (NFO). Here’s how it unfolds:
Registration: A registered Hungarian production company, or an SPV, is required to file the application with the NFO.
Documentation: Producers must submit a plethora of documents including the film’s script (in Hungarian), production schedule, detailed budget, financing plan, and proofs of tax credit or co-production agreements, all verified for financing adequacy. These documents must be filed at least 30 days before filming commences in Hungary.
Tax Credit Calculation: The NFO calculates the tax credit amount based on the submitted budget, setting the stage for financial planning and execution.
Procedure for Claiming the Rebate
Once filming is underway or completed, the production company must file for a Tax Certificate quarterly or monthly. This involves submitting detailed accounting records and supporting documents for audit by the NFO. Following the audit, the NFO finalizes the eligible expenses and confirms the rebate amount, issuing a Tax Certificate. The entire process from application to rebate receipt generally spans 50-90 days, ensuring productions can recoup their expenses in a timely manner.
Hungary’s 30% film tax rebate is an exemplary initiative that not only bolsters the local film industry but also attracts international productions looking to benefit from cost-effective yet high-quality film production services. Whether you’re considering a new production or planning an international co-production, Hungary’s tax rebate system offers compelling financial and creative incentives to make your project a success.