Germany unveils tax-rebate system for film prod


COLOGNE, Germany -- German culture minister Bernd Neumann on Wednesday unveiled the particulars of the country's new tax-rebate system for film production, describing it as "a major breakthrough for the German film industry."

The system, which replaces the country's defunct film fund financing model, will see the German government hand out ?60 million ($75 million) a year for the next three years in the form of tax rebates.

Qualifying feature, documentary and animated films will be able to claim 16-20% of their production costs incurred in Germany.

To qualify, at least 25% of a films' total budget must be spent in Germany, or 20% for films budgeted at more than ?20 million ($25 million). Films with a German expenditure of ?15 million ($18.8 million) or more qualify immediately, regardless of the percentage of the total budget accounted for by the German spend.

Feature films budgeted at ?1 million ($1.25 million), animation films costing ?4 million ($5 million) or more and documentaries with a minimum budget of ?200,000 ($250,000) can apply for the rebate.

Neumann said that projects will not have to pass muster with a state board or other "middle men" but instead will be judged based on a points system.

The total rebate is capped at ?4 million ($5 million) per film but producers can apply for rebates of up to ?10 million ($12.5 million) if at least 35% of the movie's budget was spent in Germany or if the film qualifies by amassing at least two-thirds of the maximum possible "points" available for feature, animation or documentary projects.

A production receives points based on the national origin of its cast and crew as well as the "cultural origin" of the film's story. A project based on a German novel or German historical figure, for example, would receive more points than an American story that is partially shot in Germany.

Productions also can earn points by shooting in Germany, both on location and on German sound stages, or by doing post-production work here. A smaller number of points will be given for shooting in or using talent from countries of the European Economic Community (the European Union plus Iceland, Norway and Liechtenstein.)

Projects must amass a certain minimum number of points to qualify for the German tax rebate. The exact criteria are different for feature films, documentaries and animation projects. Further details, as well as application forms, are available on the German culture ministry's Web site:

International co-productions also can apply for the rebate, provided they have a local German or European partner or a production subsidiary based in Germany. Producers of international co-productions can only apply for the rebate if they are a creative producer in the project -- not simply a co-financer -- and if they are providing at least 20% of the film's total budget, or at least ?5 million ($6.25 million) for films budgeted at ?25 million ($31.3 million) or more.

Projects must have 75% of their financing in place to qualify for the German tax rebate and must begin principle photography within three months of getting rebate approval.

The rebate will be paid out either at the end of production or in three separate payments -- 33% at the start of shooting, 33% after delivery of the first rough cut and the final 33% following completion of the film and audited approval of the budget.

All approved projects must begin principle photography between January 2007 and June 30, 2009. At the end of 2009, the German government will determine whether to extend, change or drop the new model.