Jordan Unveils Tax Incentives for Foreign Films
Projects that fulfill certain criteria will be exempt from VAT and customs and wages tax
After the shoot for Star Wars: Episode VII was snatched from under its noses and took off to Abu Dhabi in the United Arab Emirates, the Jordanian government has now approved a package of tax reductions to attract film and TV productions.
Although it is yet to be formally announced, the Royal Film Commission Jordan has told The Hollywood Reporter that the government in September made the approvals that will see certain projects receive exemptions from VAT, the withholding tax for foreign film crews and customs taxes.
"VAT is around 16 percent, while withholding tax is 7 percent of wages," said the Commission's general manager, George David, adding that the package was "already in effect now."
To qualify for the incentives, productions must amass points over a set of 13 criteria.
"Most are related to wages and the economic impact in Jordan," says David. "Local spending, how many crews are hired, how many crews are trained. There's also the wages of the crew — the more wages, the more points they get."
Other criteria look at how the project promotes Jordanian culture or tourism.
"For example, if the film involves tourist sites, like Petra, then it's worth extra points."
One of the most famous scenes from Indiana Jones and the Last Crusade had Harrison Ford and Sean Connery riding horseback out of the iconic treasury of Petra, an archeological city carved out of stone dating back as early as 300 BC.
Jordan has traditionally been the Middle East's destination of choice for major Hollywood productions, going back as far as Lawrence of Arabia in 1962. Many big-budget films since have followed David Lean's lead and shot in the county's vast desert valley Wadi Rum. The latest productions that have filmed there include Prometheus, Zero Dark Thirty, Transformers: Revenge of the Fallen and the upcoming Exodus: Gods and Kings.
But recent moves from Abu Dhabi, which announced a 30 percent tax rebate incentive in 2012, have seen it emerge as a major regional draw. The three-week Star Wars: Episode VII shoot arrived shortly after production wrapped on Fast & Furious 7, which had been filming on the city's streets.
"We've been trying to push [this tax incentives package] through for many years," admits David. "And we finally got approval. It's basically to attract more production by bringing down their bottom line. Because it's all about their bottom line."