Hungary Ups Film Production Tax Rebate to 30 Percent

"Die Hard 5" shot in Hungary thanks to tax rebates.

The new rebate will be adopted later this year and is designed to attract more international projects to the country.

Karlovy Vary — Producers making movies in Hungary will be able to reclaim up to 30 percent of local spend under an increase to a production tax rebate due to be ratified later this year.

Approved last month by the European Commission, Hungary's new base rate rebate for productions shooting in the country is being upped five points to 25 percent.

But under a provision to allow for shooting locations beyond its borders, producers making films in Hungary can also apply for the rebate on as much as 20 percent of their overall spend, lifting the tax kickback to 30 percent overall.

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The new scheme, which makes Hungary's one of the most generous in Europe, is designed to maintain the territory's appeal for high profile productions. Other top rebates in the region include the U.K.'s 25 percent and Holland's 30 percent incentive.

Hollywood movies that shot in Hungary in recent years include Paul Feig's Spy, starring Jude Law and Jason Statham, and Bruce Willis franchise, Die Hard 5: A Good Day to Die Hard.

Agnes Havas, chief executive of the Hungarian National Film Fund, said the rebate scheme is also increasingly attracting top drawer European projects, including a raft of Scandinavian films.

"It's great news for the Hungarian economy, the film industry, studios, service companies, crews, hotels and restaurants," she told The Hollywood Reporter.

"For every forint (the local currency spent), the government gets 1.34 back in tax take," she added.

Local Hungarian filmmakers can now also access up to 100 percent funding for their projects from the fund, which has an annual budget worth around $24 million, provided the film is shot in Hungarian and is produced locally, she added.

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One film that may attract that backing is Hungary's most ambitious film to date, a $6.5 million budget epic based on a 19th century poem about medieval knights in armor fighting for the prize of a beautiful young bride and the nation's glory.

The project, penned by Gyorgy Palfi, one of the country's most prominent young directors, has attracted some controversy after government film commissioner, Budapest-born U.S. producer Andy Vajna, said he wanted Palfi to use a specialist stunt coordinator for second unit work on an ambitious four-minute single take of a contest between two fully-armored characters on horseback.

Palfi says he feels Vajna is interfering in his creative judgment but Havas insists the fund simply wishes to be sure Palfi, who has a reputation for brilliant art house films such as Hukkle andTaxidermia, can shoot action.

"Palfi has the best artistic vision; his script is fantastic. His previous films were not action movies and we want to be sure the action scenes work."