German Government Tops Up Tax Subsidies

The Grand Budapest Hotel Berlin Film Festival - H 2014
Twentieth Century Fox

Berlin gives producers a $12 million Christmas present, reversing previous cuts

The German government has come to the rescue of local producers and visiting crews, proposing a new law to reverse cuts made to the country’s popular film tax subsidy system.

The system, the Federal German Film Fund, or DFFF, played a key role in attracting high-profile productions to shoot in Germany including such recent features as Wes Anderson’s The Grand Budapest Hotel, George Clooney’s war drama Monuments Men and The Hunger Games – Mockingjay: Part. 2, the final film in the hit YA fantasy franchise.

Read More Berlin: How Wes Anderson Discovered His ‘Grand Budapest Hotel’

Steven Spielberg’s untitled Cold War thriller, starring Tom Hanks and Amy Ryan, also took advantage of the DFFF when it shot in Berlin this year.

To the dismay of local and international producers, Berlin this year announced cuts to the DFFF for 2015, saying the budget for the program would be cut by around $12 million to just over $60 million. But on Dec. 19, the German government gave filmmakers a Christmas gift, confirming that they would restore full funding to the DFFF from 2016 on, bankrolling the tax subsidy program with an $74 million (€60 million) annual budget.

“We welcome today’s decision,” said Christoph Fisser, co-head of Germany’s Studio Babelsberg, which stood to lose most from the DFFF cuts. “The politicians have finally understood that it was particularly the DFFF that allowed German in the past few years to build itself up into an internationally-recognized production location.”

“The DFFF stimulates film production and Germany’s international competitiveness,” agreed Alexander Thies, chairman of the association of German producers. “(The system) doesn’t cost tax money, it increases it.”

The government decision is a clear victory for the German industry, which was united in opposition to the cuts.

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