Czech Republic: How to attract film makers

29.03.2016

The amendment to the act which aims to amend the rules of cinematography support for film makers from the Czech state budget has been prepared by the Ministry of Culture of the Czech Republic, together with the State Cinematography Fund, and was approved by the Chamber of Deputies at the beginning of March this year. It is now waiting for its journey to the Senate, and then to the desk of the President.

The amount for redistribution is currently estimated at CZK 180-200 million (approximately EUR 7 million) annually. The actual amount will depend on revenue from audio-visual fees. Support will specifically focus on the production of Czech cinematographic works and their promotion abroad. The forthcoming amendment does not only regulate contributions to support local films, but also should attract foreign film production.

This seems quite appropriate. In 2004, a kind of golden era for the domestic film industry came to an end, especially due to the launch of an incentive scheme in neighbouring Hungary. Here in the Czech Republic, a system of film incentives was, after a fashion, launched in mid-2010, but the effect was not as revolutionary, as the Hungarian system of incentives is much simpler. Hungary has therefore been host to many foreign film crews. This is what the new amendment is trying to respond to. The total sum for these incentives is expected to increase to a total amount of approximately CZK 500 to 800 million. Also, it will no longer be necessary for film makers to submit applications for support at the beginning of the year, but they will be able to do so throughout the year instead. Another thing that should attract foreign film makers is the guarantee of the full reimbursement of 20% of costs spent in the Czech Republic.

Critics of the new legislation incentives ask the traditional question as to whether it is appropriate for the state to deform the market with other subsidies. Proponents argue that the Czech Republic, in the case of subsidies, is not doing anything different to the neighbouring states, and the dereliction of incentives would mean the loss of a competitive advantage.