Production Incentives
Get up to 20% in production incentives. All you have to do is register and fulfill the basic conditions.
Incentives and How They Work
The incentive programme was developed by the Ministry of Culture and is administered by the Czech Film Fund. The incentives apply to Czech and foreign audiovisual works produced in the Czech Republic.
Incentives take the form of a refund of up to 20% of the eligible costs spent on audiovisual production. The Ministry pays the refund directly to applicants through the Czech Film Fund after production is completed in the Czech Republic.
The production incentive programme 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 film industry and cinematography in Europe and internationally.
All documents and forms on production incentives can be found on the website of the Czech Film Fund.
Please note all the forms are in the Czech language, you need a Czech service production company to enter the program.
Criteria
Incentives apply to films intended for distribution in cinemas and to certain types of television production. These can be both domestic and foreign 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.
|
Eligible Projects |
Minimum Runtime |
Minimum Czech Spend |
|---|---|---|
|
feature or animated film (cinema, TV) |
70 minutes |
CZK 15m |
|
documentary film (cinema, TV) |
70 minutes |
CZK 2m |
|
fictional TV series |
30 minutes/episode |
CZK 8m/episode |
|
animated series |
5 minutes/episode |
CZK 1m/episode |
Incentive Amounts
The amount of the incentive is calculated as a return on Czech and certain international eligible costs up to CZK 150 million per project.
Incentive calculation is governed by European Commission rules
- The basis for the calculation can be a maximum of 80% of the total budget.
- The sum of all public 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 |
20% |
|
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 |
What are Eligible Expenditures?
To be eligible, costs must be incurred after the date of the submission of registration papers (the “definitive date”); costs incurred prior to that date are not eligible.
Czech Eligible Expenditures
For the purposes of the programme, 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?
The following costs are ineligible (as per point 8.7.5 of the Czech Film Fund Statutes):
- material performance provided for the purpose of implementation of the project by a third party who is a co-producer or co-organiser of the project, where the applicant did not pay the price for such performance;
- material performance provided by the applicant for the purpose of implementation of the project, particularly the exploitation of the applicant’s own production capacities;
- interest on loans and borrowings;
- costs of purchase of receivables;
- bank charges, with the exception of charges associated with the keeping of project bank accounts;
- value-added tax (VAT), with the exception of justified cases where the applicant is not entitled to a deduction of, or is not a payer of, the value-added tax;
- contractual fines, default interest and late charges, severance pay, compensation of material and immaterial loss;
- the purchase price of real estate;
- acquisition costs of tangible assets which are depreciated by the applicant in accordance with Act No. 586/1992 Coll. on Income Taxes, as amended;
- acquisition costs of movable tangible assets and sets thereof with a useful life longer than one year, if they are not accounted for as assets within the meaning of Section 9(1)(g) of the Decree of the Ministry of Finance No. 500/2002 Coll., as amended;
- depreciation of tangible and amortisation of intangible assets and the residual price of such assets;
- costs of the development of the incentivised project to the extent of remuneration for the creation of the script and procurement of the funding of production of the audiovisual work;
- the applicant’s operating expenses not associated solely with the incentivised project;
- distribution and selling costs, costs of promotion, marketing and public relations;
- litigation and arbitration costs, including court and other fees and attorney’s fees associated with litigation and arbitration;
- costs of the reimbursement of travelling expenses of the crew and actors during their stay outside the territory of the Czech Republic;
- staff costs which are not mandatory for employers under the law (such as contributions to additional pension insurance, life insurance, gift to jubilees, contributions for recreation, etc.);
- income tax, road tax, real estate tax, real estate acquisition tax, excise tax and customs duty;
- costs incurred by the applicant in connection with payment of smart money, compensation for work injuries, lost earnings, etc.;
- scholarships or other similar payments;
- costs of donation SMS and MMS;
- costs of alcoholic beverages and tobacco products;
- the applicant’s membership fees in registered associations or other legal entities;
- emoluments paid to the applicant’s statutory body or to members of its statutory or supervisory body for the exercise of their office;
- reserves for exceeding the budget or reserves created for other purposes;
- paid advances for the supply of goods and services;
- exchange rate losses; and
- any costs associated with the shooting of the audiovisual work whose realisation is the subject matter of the incentivised project if the applicant notifies the Fund at the time of submission of the incentivised project listing application, or at a later time within the period during which he is obliged to realise, in accordance with the incentivised project listing certificate, the minimum number of shooting days specified in such certificate, that the shooting is not a part of the incentivised project.
Culture Test
Part of the registration process, which is the first phase of applying for a production incentive, is the culture test.
The Czech Film Fund Film Incentive Commission, whose members are named by the Minister of Culture based on recommendations from professional organizations, evaluates the culture tests.
The culture test forms for various types of projects, together with the application for registration, can be downloaded in Czech at the Czech Film Fund website.
How and Where to Apply
To register your project, please contact a Czech service company, a list of which can be found in our Industry Contact Database.
Find out how to proceed at each stage.
These rules are effective from January 1, 2017.
Project Registration
Projects can be registered throughout the year. The registration fee is CZK 30,000 (€1,215).
Please submit:
- completed culture test
- project synopsis (translated into Czech)
- Czech version of the script
The culture test is evaluated by a Czech Film Fund commission. The incentives department will inform you of the results.
Once you've received the registration confirmation, you can then request your project listing and incentive allocation.
Expenses incurred after the day the registration documents are submitted (the “definitive date”) are eligible; expenses incurred prior to this day are not eligible.
The registration request form and the culture test forms for various project types can be downloaded in Czech from the Czech Film Fund website.
For more information about registration, please contact the Production Incentives Department
E-mail: pavla.mrazkova@fondkinematografie.cz
Tel.: +420 778 718 541
Project Listing (Rebate Allocation)
The project listing application can be submitted at any time throughout the year. However, the timing of the application is important.
- Within 4 months of submitting the project listing application, at least 10 shooting days in the Czech Republic must have been completed (for a Eurimage project, the deadline is 9 months). The latest that an application may be filed is on the 10th day of shooting in the Czech Republic.
Submit the following:
- shooting schedule
- budget for overall and eligible expenses
- financing plan
Based on this information, the Czech Film Fund allocates the estimated funds for the rebate for the applicant.
The project registration application can be downloaded in Czech from the Czech Film Fund website.
Application for Payment of Subsidies
Applications for payment of the incentive must be made within 3 years of the issue of the Registration Certificate.
Information on all the documents that need to be attached to the application can be found on the form. The most important documents are:
- an account of eligible costs and an auditor's verification report
- the co-production contract (if the applicant is also a co-producer)
- service contract
You can submit up to two applications for the incentive
- the first application after the completion of the filming or after the minimum eligible costs have been spent
- the second application after all work in the Czech Republic has been completed
Indicate on the form whether the incentive should be paid out in one lump sum or in two lump sums. The form is available in Czech on the Czech Film Fund website.
Credits
In the end credits, please state: Filmed in the Czech Republic with Production Incentives from the Czech Film Fund.
