Czech government and stakeholders agree to increase funding of production incentives with new levy on streamers

At the Karlovy Vary International Film Festival, the Ministry of Culture of the Czech Republic announced changes in the film incentive program and the so-called parafiscal levies. Streamers will be taxed on par with broadcasters and cinemas. The prime minister and the minister of culture announced the reform has been agreed by the government and the industry. The legislative process will now follow. The reform should take an effect from 2025/2026.

Production incentives

 Under the new act, the total annual incentives budget will be calculated at six times the amount of money raised by the parafiscal levies plus the mirror funding – the government will pay to the system the same amount as the parafiscal levies.  The amount is estimated at CZK 2 billion (USD 92 million) per year. This year the country has had CZK 1,4 billion / USD 64 million available, the highest amount ever allocated by the Czech government.

2024–2025

The government, the industry leaders and Czech Film Commission with its shelter institution Czech Film Fund are aware the production incentives program cannot stay closed till the new legislative starts functioning if the country want to keep their reputation as one of the leading hubs for the international production. Both the prime minister Petr Fiala and the minister of culture Martin Baxa understand and agree opening the incentives as soon as possible is crucial to maintain stability and continuity of business. They vowed to find the solution and announce it as soon as possible this year.

Parafiscal levies

Parafiscal levies for the Czech Film Fund are set at 2 %. The VOD platforms (streamers) will pay up to 3,5 %. The streamers will have 3 options:

– 3,5% of the yearly revenue paid to the Czech Film Fund;

– 2% of the yearly revenue paid to the Czech Film Fund and 1,5% direct investment obligation;

– 1% of the yearly revenue paid to the Czech Film Fund and 2,5% direct investment obligation.

 In case of the direct investment, at least 50% of the amount must be invested in a coproduction with an independent producer, or for licensing their audiovisual works.