Germany joins incentive republic

20% rebate aims to boost Babelsberg, fend off U.K. competition

Can a new tax rebate make it Deutschland uber alles?

In the ever-increasing global film production scene, with the ever-expanding list of locations that offer incentives, Germany has become the newest player. In January, the country quietly introduced the German Federal Film Fund, a 20% rebate for film production.

Intent to get the word out, a contingent of Germans arrived in Los Angeles this past weekend, and they're taking meetings and hosting dinners for executives, filmmakers and the media to trumpet the new tax scheme. Among the group is Berlin Mayor Klaus Wowereit; Petra Muller and Kirsten Niehuus, managing directors of regional film funding body Medienboard; and Studio Babelsberg managing director Carl Woebcken.

The aim of the rebate is to increase location filming by positioning Germany as a more attractive alternative to the English production scene and to counter the low-cost attractiveness of such countries as Romania, Hungary and the Czech Republic.

"We are something in between London and Hungary," Medienboard's Kathrin Steinbrenner said. "We are not as expensive as London and not as cheap as Hungary. But regarding the production quality and the professionalism, we are as good as London, but we are cheaper."

The idea for the rebate developed after the German government put the kibosh on the country's media funds. The government did not like seeing money leaving to fund productions elsewhere.

"The new German cultural minister decided to develop a scheme, something that would support Germany as a production location and film location, so that the money doesn't go abroad but would be invested here," Niehuus said. "So in the fund, one of the main parts is the German spend."

To qualify, 25% of the total budget must be spent in Germany. If the budget is more than $26 million, that drops to 20%. For international co-productions, the German participation must be at least 20%; if the budget is more than $32 million, a participation of $6.5 million is sufficient. The budget of the film project must be more than $1.3 million for feature films, $3.3 million for animation films and $226,000 for documentaries.

A project must have at least 75% of its financing in place, and it must pass a "cultural test," with points given for using German locations or studios; German actors, artists or technicians; and German story or history. A little bit of everything would be the perfect match.

Because the rebate is only for film production, it must have a German distributor with a guarantee that it will be seen on at least 30 screens.

The plan could make famed Babelsberg an even more formidable player; the studio faces off against such European competitors as England's Pinewood Shepperton Studios and facilities in Karlovy Vary in the Czech Republic.

The Wachowski brothers produced a good chunk of their "V for Vendetta" at Babelsberg and plan to shoot "Speed Racer," their first directorial effort since 2003's "The Matrix Revolutions," at the facility to take advantage of Germany's rebate.

Germany already was a large player in Europe's independent art house scene, and experts said the rebate will only bolster that.

Pat Crowley, who has worked in Germany as a producer on the "Bourne" movies, is excited about the rebate. The producers looked at basing "The Bourne Ultimatum" in Germany but instead opted for London, shooting only the film's opening sequence in the country.

"(The rebate) might have made a significant difference," Crowley said. "Germany is not a cheap place to shoot, but it's not as expensive as London. (With the rebate), I'm certainly interested in looking for other shows to take to Berlin."