Lithuanian Parliament Approves 20 Percent Tax Incentive
Producers expect that the number of films made in Lithuania will increase 300 percent in 2014.
BERLIN – The Lithuanian parliament has adopted amendments to Lithuania’s corporate tax law, establishing a new 20 percent film tax incentive scheme modeled after the existing scheme in Hungary.
Both foreign and local producers will be able to benefit from the scheme, which is valid from Jan. 1, 2014, until Dec. 31, 2018.
The scheme was ratified by the European Commission in December, and the Lithuanian Film Center will administer it. An expert commission will assess the cultural content of applicant films based on scripts and will determine if a film meets at least two of five cultural criteria.
Tax relief will be granted to Lithuania-based legal entities with Lithuanian corporate tax liability that have provided funding to film producers for the production of films in Lithuania.
At least 80 percent of all production spending must be in Lithuania, with a minimum of 150,000 litas ($57,727) and a total maximum amount of funding that does not exceed 20 percent of production costs.
“These changes are important to the film industry and businesses,” said Rolandas Kvietkauskas, head of the Lithuanian Film Center. “The new scheme is an opportunity for profitable companies to support film production and reduce their corporate income tax at the same time.”
“This incentive is vitally important for our film industry,” said Arturas Zuokas, mayor of capital Vilnius. “The tax amendment will encourage Hollywood’s and Europe’s greatest filmmakers to choose Vilnius and Lithuania for shooting, bringing tax revenue and new jobs with them. This incentive will benefit not just the film industry, but the entire country.”
Vilnius Film Office director Jurate Pazikaite said that the incentives will enable Lithuania to offer both high production quality and financially advantageous terms, making the country competitive in providing production services.
“We have highly competent film professionals, unique landscapes, architecture and all the seasons of the year,” Pazikaite said. “However, the absence of tax incentives caused us to lose projects worth millions as their creators decide to take them elsewhere. I am very pleased that this situation changed today and that Vilnius is once again in the running as a cost-effective location with highly educated and greatly skilled human resources.”
Pieter Jan Brugge, executive producer of Edward Zwick‘s 2008 film Defiance, clarified that Lithuania already has advantages of high value and low cost.
“The major reason we chose Lithuania was for authenticity,” said Brugge. “The forest locations we found in Lithuania were spectacular, and almost every place we ended up filming was within a reasonable driving distance of Vilnius, where the production company was based. Equally important, there was an experienced crew base. And, of course, the low cost was a very important factor as well. We saved millions of dollars. It's doubtful we could have made the film anywhere else in Eastern Europe for this budget [$30 million]. Creatively and financially, Lithuania gave us the biggest bang for our buck.”
- MOST SHARED
- MOST POPULAR