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Tax Incentives Boost European AV Sector

Ilse Schooneknaep reports on the initial findings of a new study into impact of tax incentives on the European audiovisual sector.

The initial findings of a new report on tax incentives and their impact on film and audiovisual production in Europe were presented at a public conference in Brussels on October 20, 2014.

Conducted by the media consultancy firm Olsberg SPI on behalf of the European Audiovisual Observatory, the report shows that tax incentives attract foreign investment and make it possible for international projects to scout around for infrastructure and talented production crews. This has encouraged job growth and investment in infrastructure as well as greater mobility amongst creative workers.


HBO drama Game of Thrones was attracted to Croatia by tax incentives.

The report, now available through the EAO website, identifies three main forms of tax incentive in Europe: tax shelters in Belgium, Ireland, Lithuania, Hungary and France; tax rebates in Austria, the Czech Republic, Germany, Malta and the Netherlands; and tax credits in France, Italy and the UK.

These incentives are increasingly being used across Europe to support local audiovisual industries, particularly through attracting inward investment. At the same time, some European countries (e.g. Scandinavia) have developed a successful audiovisual industry without tax incentives, suggesting that incentives might be more of a positive initiator of film investment than an absolute necessity.

The report also notes that countries are clamping down on abuses. Some have altered their incentives from the tax shelter measure to the more controllable tax credits and self-financing tax rebates.

Tax incentives in small nations

The use of tax incentives in small countries such as Belgium was highlighted in their presentation. Here, tax incentives have been one of the catalysts of new-found success of the audiovisual industry.

Since their inception in 2003, the Belgian audioviual industry has professionalized and produced films that were successful across national borders as they generate bigger budgets and attract interesting partners. They have also attracted international productions to Belgium (e.g. Grace of Monaco and Nymphomaniac), resulting in employment growth, investment in infrastructure and the professionalization of local industry.

However, Olsberg SPI identified some of the methodological problems they encountered in their study. Statistical data, for example, is not always comparable between countries. Some territories provide detailed information while others don’t keep track of their measures, making it difficult to provide a correct market overview.

Olsberg SPI concluded their presentation by pointing out that thanks to the incentives there had been a rise in film production capacity and infrastructure. Additionally, there is no evidence that the utilization of tax incentives by dominant productions has cannibalized the possibility to utilize the measure by smaller productions.

Production infrastructure

Following Olsberg SPI’s presentation, a panel of researchers and industry professionals discussed how the needs of the production infrastructure have been altered by the rise of tax incentives. The long-term impacts of incentives as a policy instrument were also debated.

Pierre-Emmanual Lecerf (CNC) empathized the necessity of tax incentives for the French audiovisual sector in terms of creating more than 3,500 jobs, notably in animation.

Sanja Ravlic (Eurimages, Croatia) mentioned the importance of the incentives for small nations such as Croatia, which is now one of the main shooting locations for the critically acclaimed HBO series Game of Thrones. Thanks to tax measures, the Croatian audiovisual industry can learn from their international visitors.

Benoît Ginisty (FIAPF) said that the rise of new release windows meant producers are constantly struggling to make films in the EU.

Pauline Durand-Vialle (FERA) claimed that tax incentives have helped film directors to look beyond national productions and have enhanced “European creativity”. However, she added we must be careful as incentives don’t always go to those who need it the most. She called for a consistent European audiovisual policy that helps shape tax incentives.

Finally, Johannes Studinger (UNI MEI) echoed Pauline Durand-Vialle (FERA), adding that we have to keep in mind that tax incentives are just one part of the film and television funding, and that there needs to a holistic approach to deal with the fragile and ever fluctuating European market. The growth in jobs and the foreign investments incentives bring are not absolute, though they are one of the necessary tools to maintain a strong European audiovisual industry.

A live recording of the presentation and panel discussion is available here.

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