Be Italian....BE ITALIAN
Italian Incentive Update - Italy has recently updated its film tax incentive, maintaining the core 40% tax credit for international productions, but with several key changes aimed at enhancing the quality and focus of supported projects.
1. 40% Tax Credit: The primary tax credit rate remains at 40% for international film and television productions that spend at least €250,000 in Italy. However, this rate drops to 30% for certain above-the-line costs related to non-European entities; 30% for certain above-the-line costs - fees for non-European directors, writers, and main actors. These reductions apply because Italy prioritizes European talent. The lower 30% rate ensures that productions involving significant non-European personnel receive a smaller incentive for these specific costs.
2. AI Usage Restrictions: A significant new rule is that costs related to the use of AI in production are not eligible for the tax credit, except when AI is used for special effects. This move reflects Italy's effort to promote high-quality and traditional filmmaking methods while still allowing some modern technological applications.
3. Focus on Quality: The Italian government is keen on raising the quality of projects that benefit from these incentives (intended to push international producers to make more Italian-focused films and TV series using local talent) and will emphasize the support of projects that meet high standards; These new requirements/standards have not been fully announced as of yet.
Also, Under the new rules, international co-productions will face an €18 million ($19.7 million) cap on tax credit payouts for projects where at least 30 percent of the production is made in Italy. Local productions will be capped at €9 million ($10 million). The overall fund for film and audiovisual investments in 2024 remains unchanged at approximately €700 million ($782 million).