Hungary Boosts Production Incentives Amid Eastern Europe Battle for Shoots

Jim Engelbrecht / Newscom
Budapest, Hungary

Ang Lee's 'Gemini Man,' starring Will Smith, and the latest 'Terminator' film are among the movies that have shot in Budapest this summer.

Hungary has boosted its production tax incentives from 25 to 30 percent in an effort to maintain its competitive edge in the battle among Eastern European countries for foreign shoots.

The increase, approved by the European Commission, is guaranteed until 2024 and applies to all films shooting in Hungary.

In 2004, the country became one of the first in Eastern Europe to introduce tax incentives at a time when it was competing fiercely with the neighboring Czech Republic for productions and Prague's Barrandov Studios were winning top Hollywood shoots, such as The Chronicles of Narnia.

Budapest's bid to become a regional rival to Prague paid off, and a stream of top international movies, including Steven Spielberg's thriller Munich, about the 1972 Summer Olympics killings of Israeli athletes, were drawn to Hungary.

The Hungarian incentives prompted the introduction of a raft of incentives in the region, including a 20 percent rebate scheme in the Czech Republic. Today, only tiny Estonia, far to the north of Hungary, has a scheme that is equal to the country's new 30 percent rate.

Poland, another one of the region's major players, does not offer tax incentives, but instead has a well-funded revolving door loan fund to encourage domestic and international productions.

Although some other other European countries also offer generous schemes, France, Ireland, Belgium and the Netherlands all have deals worth at least 30 percent, Hungary's direct competitors are historically in its region.

The main purpose of the increase is to "preserve Hungary's leading position and competitiveness in the European film industry," Andy Vajna, Hungary's film commissioner, told The Hollywood Reporter. "Hungary is following all those countries that have recently raised tax incentives in order to keep its leading position in the European film production market." 

Ang Lee's Gemini Man, starring Will Smith, and the latest Terminator film are among the movies that have shot in Budapest this summer.

Hungary has among the highest per-capita film spending in Europe, accounting for 0.15 percent of gross domestic product in 2015, according to the European Audiovisual Observatory. Last year, production spending totaled $400 million.