Incentives and How They Work
The incentive program was developed by the Ministry of Culture and is administered by the Czech Audiovisual Fund. The incentives apply to Czech and foreign audiovisual works produced in the Czech Republic.
Incentives take the form of a refund of 25 – 35 % of the eligible costs spent on audiovisual production. The cash rebate is paid directly to applicants through the Czech Audiovisual Fund after production is completed in the Czech Republic.
The production incentive program is unique in that, unlike subsidies, no financial aid is paid before the producer has invested (spent) its own funds in the Czech Republic. This investment is a purchase of Czech goods and services. This is followed by an audit of the funds spent.
The Czech Republic has been offering incentives for film and series production since June 2010, thus joining not only a number of European countries but also regions in the USA, Canada, and Australia that offer them. The aim of the incentives was to restore the competitiveness of the Czech audiovisual industry in Europe and internationally.
Please note all the forms are in the Czech language. You need a Czech service production company to enter the program.
Incentives apply to films intended for distribution in cinemas and to certain types of television production. These can be both domestic and international projects.
The first criteria is passing a cultural test as part of the registration process. The project must also meet the following minimum runtime and eligible expenditure criteria.
Criteria
|
Eligible Projects |
Minimum Runtime |
Minimum Czech Spend |
Incentive Amount |
|---|---|---|---|
|
feature film |
60 minutes |
CZK 18mil. |
25% |
|
fictional series |
20 minutes x number of episodes |
CZK 7.5mil. x number of episodes |
25% |
|
animated film |
60 minutes |
CZK 5mil. |
35% |
|
animated series |
5 minutes x number of episodes |
CZK 5mil. lump sum |
35% |
|
documentary film |
60 minutes |
CZK 2.5mil. |
25% |
|
documentary series |
20 minutes x number of episodes |
CZK 2.5mil. x number of episodes |
25% |
| digital production | see relevant project type above | CZK 5mil. lump sum |
35% |
• The amount of the incentive is calculated as a return on Czech and certain international eligible costs up to CZK 450 million per project.
• The registration fee is CZK 60,000.
• Incentive calculations are governed by European Commission rules
• The basis for the calculation can be a maximum of 80% of the total budget.
• The sum of all state aid paid out may not exceed 50% of the total budget.
|
Eligible Expenditures |
Brief Characteristics |
Incentive Amount |
|---|---|---|
|
Czech |
Goods and services provided and paid to companies or individuals registered to pay income tax in the Czech Republic |
25% / 35% |
|
International |
International costs paid to foreign cast and crew who pay withholding tax in the Czech Republic |
66% on the withholding tax actually paid in the Czech Republic |
How to Apply
Projects can be filed throughout the year.
You will then receive the Decision on Filing.
• Within 6 months of delivery of the Decision on Filing, production must be commenced
(production includes: pre-production – principal photography – post-production).
• Subsequently, within the following 3 months, at least 10 shooting days have to be completed.
• In case of digital production (without shooting), a progress report needs to be submitted to the Fund every 6 months.
Your Czech production service company will submit these documents, in Czech language:
• culture test
• project synopsis
• script
• treatment of at least 3 pages, for documentary works
• shooting schedule / timeline
• budget for overall and eligible expenses
• financial plan
• the co-production contract (if the applicant is also a co-producer)
• service contract.
The culture test is evaluated by a Czech Audiovisual Fund committee. The production incentives department will inform your Czech service production company of the results.
You can claim costs incurred up to 6 months before the application for filing is submitted.
The incentive amount may be increased only once, and by no more than 15%.
Apply for payment within 3 years of the issue of the Decision on Filing.
For more information, please contact the Production Incentives Department
E-mail: pavla.mrazkova@fondkinematografie.cz
Tel.: +420 778 718 541.
Application for production incentive and other documents available for download in Czech language.
Eligible Expenditures
Czech Eligible Expenditures
For the purposes of the program, this is payment for supplies of goods and services directly related to the implementation of the project purchased in the Czech Republic from entities that have their registered office, place of business, or permanent residency in the Czech Republic, and have their tax domicile in the Czech Republic.
International Eligible Expenditures
These are royalties paid by the applicant (producer) to actors and crew members who are foreign nationals or persons who do not have permanent residency in the Czech Republic whose income is derived from sources in the Czech Republic and is therefore subject to a 15% withholding tax.
What Expenditures are Ineligible?
Notwithstanding the other provisions of the Act and of the Statutes, the following costs do not constitute eligible costs:
- an in-kind supply provided for the purpose of realization of the incentivized project
a) by a third party that is a co-producer or co-organizer of the project, if the applicant did not pay the price of such supply. In-kind supply means, in particular, the contribution of the co-producer's own production capacities or of the co-producer's own efforts and means for the purpose of realization of the project, notwithstanding the form or method by which they are accounted for within the scope of the project ;
b) by the applicant. In-kind supply means, in particular, the contribution of the applicant's own production capacities or of the applicant's own efforts and means for the purpose of realization of the project, notwithstanding the form or method by which they are accounted for within the scope of the project; - interest on credit and loans;
- costs of purchase of receivables;
- bank charges, with the exception of charges paid in connection with the maintenance of the project's bank account;
- value added tax, unless the application is not a value added tax payer or is not entitled to claim deduction of this tax;
- contractual fines, default interest and late charges, severance pay, compensation of property damage and non-material harm;
- purchase price of real properties;
- costs of acquisition of tangible assets that are depreciated by the applicant in accordance with the income tax regulations;
- costs of acquisition of tangible movable assets and their sets, if their utility period is longer than one year and if they are not accounted for as assets pursuant to Section 9(1)(g) of the Decree of the Ministry of Finance No. 500/2002 Coll., implementing certain provisions of Act No. 563/1991 Coll. on accounting,, as amended (the “Act on Accounting”) for accounting entities that are entrepreneurs keeping the double entry accounting system, as amended;
- depreciation of tangible assets and amortization of intangible assets and the residual price of those assets;
- costs of the development of the audiovisual work whose production is a part of the incentivized project, to the extent of costs of creation of the script and costs of activities related to the procurement of funds for the production of the audiovisual work;
- distribution and sales costs, costs of advertising, marketing and public relations;
- costs of lawsuits and arbitrations, including court and other fees and attorney's fees relating to the lawsuits and arbitrations;
- reimbursement of travelling expenses incurred by the crew and actors during their stay outside the Czech Republic;
- costs of employees in respect of whom the employers are not obliged to pay any contributions under the laws (contributions to additional pension insurance, life insurance, gifts on the occasion of jubilees, contributions for recreations, and other);
- income tax, road tax, real property tax, tax on the acquisition of real property, excise tax and customs duties;
- the applicant’s costs incurred in connection with payment of damages for pain and suffering, compensation for work injury or of lost earnings, etc.;
- scholarships or similar payments;
- donations;
- costs of alcoholic beverages, tobacco products and other addictive substances;
- fees for the applicant’s membership in registered associations or in other legal entities;
- remuneration paid to the applicant’s statutory body or to members of the statutory or supervisory body for the exercise of their office;
- reserves for exceeding the budget or reserves creation for other purposes;
- advance payments for supply of goods and services;
- exchange rate losses;
- administrative fees with the exception of the fee for submission of the application for filing the incentivized project or of the application for extraordinary extension of the time limit under Section 52g(2) of the Act;
- none of the costs incurred in connection with shooting if the incentivized project does not include shooting of any live actor’s performance pursuant to Art. 25, clause 25.4(e), with the exception of costs of special effects specified in that clause;
- in the case of shooting outside the territory of the Czech Republic, costs of supply provided to the applicant by a person registered in the Czech Republic for income tax purposes, if the actual provider of such supply is a person that is not registered in the Czech Republic for income tax purposes.
Credits
Produced in the Czech Republic with Production Incentives from the Czech Audiovisual Fund.
Logo of the Czech Audiovisual Fund.
