From the Illinois tax credit overhaul to VFX incentives in the UK and Ireland, learn how jurisdictions across the globe are redefining their programs to capture the next wave of production spending.
With 2025 behind us and 2026 ahead, the international production landscape continues to shift rapidly. From a massive overhaul of the Illinois tax credit structure to strong VFX incentives in the UK and Ireland, jurisdictions are refining their programs to capture the next wave of content spending.
In this production incentives update, we round up the latest legislative and industry intelligence so you can make the most informed decisions for your production.
United States Jurisdictions
Enacted Legislation
CALIFORNIA
Culver City: Approved in November 2025, Culver City has enacted a new incentive package in direct response to a 13% drop in regional on-location filming.
Key components include:
- A one-year pilot program that reverts film permit and staffing fees to 2008 levels, and provides free parking for productions.
- Capped at $500,000 the program will be supported by a new marketing campaign and familiarization tours in partnership with FilmLA.
- A critical tax break—the legislation suspends business tax collection for itinerant motion picture and television producers through 2036. This move is designed to retain major studio projects and support student films and smaller independent productions that drive the local creative economy.
San Francisco: The new Scene in San Francisco film rebate program offers a refund of up to $600,000 on city-specific expenses, such as permit fees, payroll taxes, police assistance and street closures.
To qualify for these funds, productions must show a strong commitment to filming in San Francisco. Projects with budgets under $3 million must complete at least 55% of their principal photography in the city, while those with budgets over $3 million must film at least 65%. The initiative also prioritizes local workforce development, requiring participating productions to partner with the First Source Hiring Program, which helps connect San Francisco residents—including economically disadvantaged workers—to job opportunities.
GEORGIA
The Savannah Economic Development Authority (SEDA) has finalized the 2026 guidelines for its local entertainment incentive, allocating $1 million for the calendar year on a first-come, first-served basis. Qualified productions can earn a 10% rebate on local non-payroll spend and resident labor, provided they meet specific Chatham County requirements, such as maintaining a local production office and shooting at least 50% of days within 60 miles of Savannah City Hall.
The 2026 policy emphasizes local workforce development, offering a $25,000 bonus for episodic productions and up to $25,000 for features that hire at least 50% of their crew from the local Georgia residency zone. Projects must also comply with new administrative protocols, including the mandatory inclusion of the Savannah Regional Film Commission's leadership on all production distribution lists (call sheets, crew lists, etc.) Additionally, all audit documentation must be submitted within 120 days of completing principal photography to remain eligible for the rebate.
ILLINOIS
Signed into law on December 12, 2025, Senate Bill 1911 enacts significant enhancements to the Illinois Film Production Services Tax Credit Act, raising the base incentive rate to 35% (up from 30%) for both qualified Illinois resident labor and in-state vendor spending. The program is extended through 2038, and introduces stackable bonus uplifts, increasing the labor credit to a maximum of 55% for productions commencing on or after July 1, 2025.
Key enhancements include:
- 15% bonus for hiring residents from high-poverty or high-unemployment areas
- 5% bonus for filming outside the Chicago metro area
- 5% bonus for relocating a television series to Illinois for its first season
- 5% bonus for achieving a certified "green" sustainability plan
Expanded eligibility rules allow productions to now qualify 13 non-resident crew positions of their choosing, and up to two (2) non-resident producers per project.
The bill also modernizes rules regarding non-resident talent. A new tiered system allows projects with budgets over $40 million to qualify up to six non-resident actors for a 30% credit on their first $500,000 in wages.
TEXAS
Austin: The Austin City Council has approved the first significant update to the city's Creative Content Incentive Program (CCIP) since its inception in 2014. The incentive rate has increased from 0.75% to 2.5%, calculated on wages paid to residents of the Austin metro area. By tying the funds directly to local labor, the city aims to ensure that the financial benefits of hosting feature films, television series, commercials, video games, and visual effects translate into tangible income and job opportunities for Austin-based crew members and creative professionals.
While measures have been implemented to streamline the application process, the program remains rigorous in its verification. Funds are only disbursed after a production wraps and can prove they successfully hired local talent, protecting the city’s investment.
Houston: Houston First Corporation has unveiled a new local film incentive program to establish Houston as a premier destination for film and television production. Designed to complement the states recently expanded $300 million incentive fund, this local initiative offers qualifying projects a 10% rebate on local expenditures, with a maximum payout of $100,000 per project. The program has been allocated an initial annual budget of $400,000, with renewal dependent on performance and available funding.
To qualify for the incentive, productions must meet specific local engagement criteria:
- 60% of principal photography must take place within a 60-mile radius of downtown Houston and demonstrate a minimum of $500,000 in local spending
- 55% of cast and crew must be comprised of Texas residents
- The principal production office must be maintained within the city of Houston
San Antonio: On November 6, 2025, the San Antonio City Council voted to rebrand and expand the San Antonio Film Incentive (formerly the Supplemental San Antonio Incentive), increasing the base rebate from 7.5% to 10% for qualifying projects and introducing new eligibility for previously excluded commercial productions.
The base rebate may also be combined with stackable uplifts:
- Local Hire Uplift: 2% bonus for hiring 35-50% local cast and crew
- Veteran Hire Uplift: 2% bonus if at least 5% of the paid cast and crew are military veterans
- Total incentive stack: The San Antonio Film Incentive can be combined with the Texas statewide incentive for a potential total refund of up to 45% of qualified spend
City officials report that San Antonio film permits have skyrocketed by 165% (from 221 in 2022 to 586 in 2025) and they aim to use these new terms to accelerate growth, attracting major feature films and series to the region.
WISCONSIN
Governor Tony Evers signed Senate Bill 45 (enacted as Wisconsin Act 15), officially re-establishing a film incentive program to boost the state's creative economy. The legislation creates a Film Production Services Credit that offers a 30% transferable tax credit on the first $250,000 of wages paid to resident employees and on qualifying non-payroll expenditures.
To manage this initiative, the bill establishes a State Film Office within the Department of Tourism, which will accredit productions ranging from scripted features to unscripted reality series. While the program offers competitive rates, it has a $5 million annual cap and a strict limit of $1 million in credits per single applicant, with the first credits available for productions commencing in 2026.
Rejected Legislation
U.S. FEDERAL
As of January 1, 2026, IRC Section 181 has officially sunset for all film, TV, theatrical, and sound recording productions that did not commence principal photography or recording by the year-end deadline. The official sunset of Section 181 marks a significant shift in federal tax strategy, as the bipartisan CREATE Act failed to pass before the December 31, 2025 deadline. While the "One Big Beautiful Bill" successfully made 100% Bonus Depreciation permanent (Section 168(k)), this alternative lacks the immediate "as-incurred" deduction benefits that made Section 181 a cornerstone for a production to finance their project and manage the cash flow.
Producers should be further cautioned that token shoot days intended to grandfather projects into the old provision are a high-risk gamble likely to trigger IRS disqualification and investor recapture. Moving forward, tax planning must focus on the "placed in service" requirements of Section 168(k).
NEVADA
During the 36th Special Session, the Nevada Legislature failed to pass Assembly Bill 5, a major film incentive package designed to facilitate the development of the Summerlin Production Studios with Sony and Howard Hughes Holdings. Although the bill narrowly cleared the Assembly (22-20) and a Senate committee, it was ultimately rejected by the full Senate in a tight 10-11 vote. The legislation had proposed approximately $120 million in annual transferable tax credits over 15 years to support a $1.8 billion private infrastructure investment.
International Jurisdictions
Enacted Legislation
AUSTRALIA
Streaming Quotas: In a landmark regulatory shift, Australian Parliament passed the Communications Legislation Amendment (Australian Content Requirement for Subscription Video on Demand Services) Bill 2025. Effective January 1, 2026, the new law establishes formal content quotas to strengthen the country’s screen industry.
Under the requirements, SVOD platforms with more than 1 million subscribers must invest a minimum of 10% of their total Australian programming spend—or 7.5% of their gross Australian revenue—into new Australian drama, documentary, children, and arts programming. This "expenditure or revenue" choice offers platforms flexibility while ensuring a significant capital injection into the local production ecosystem. The move fulfills a key pillar of the government's national cultural policy, Revive, ensuring that international majors contribute proportionally to the creation of Australian stories.
Location Offset: In late 2025, the Australian government solidified the 30% Location Offset (up from 16.5%), a move designed to attract large-budget international projects. In its December 2025 Drama Report, Screen Australia reported a record-breaking $2.7 billion production spend for the 2024/25 financial year, largely driven by a surge in international projects.
CANADA
Federally, the CRTC implemented key Online Streaming Act measures in late 2025, modernizing "Canadian Content" definitions to recognize creative roles such as showrunners and VFX supervisors, and requiring streaming platforms to contribute 5% of their Canadian revenues to the domestic broadcasting system.
COLOMBIA
Colombia has increased its 2026 CINA tax credit budget by 49% to a record $90 million to accommodate the growing number of high-profile international productions and video game projects choosing the country.
GREECE
After a temporary suspension, the Greek 40% cash rebate program reopened for applications in 2025. The relaunched program, administered by EKKOMED (the newly merged entity of EKOME and the Greek Film Centre), comes with significant structural changes to ensure sustainability.
Key program details include:
- Incentive Type: 40% Cash Rebate
- Project Cap: €12 million
- Compensation Cap: Limits qualifying Above-the-Line (ATL) wages to 35%
- Minimum Spend: €100,000 (Feature Films), €60,000 (Documentaries), €25,000 per episode (TV Series)
- Key Requirement: Must engage a Greek production service company or co-producer
Due to the backlog of previous claims that will draw from the current year's funding, the annual cap is expected to fill quickly, making immediate application through a local Greek co-producer or service company essential.
HUNGARY
On December 23, 2025 Hungary solidified its 30% film tax rebate. A new registration cap of HUF 140 billion (approximately USD $426M) was announced and implemented for the first half of the year, with a secondary cap for the latter half expected in June. The 2026 rebate collection account, used to pay out claims, will be capped at HUF 70 billion (USD $213M) — a figure lower than 2025’s HUF 81 billion (USD $245M). Note, HUF 21 billion (USD $64M) is specifically reserved for local projects.
Registrations will continue on a first-come, first-served basis. Projects falling outside the initial cap will be placed in a queue for the next allocation cycle. Importantly, the core elements of the incentive remain unchanged, ensuring the system remains highly competitive for international production.
IRELAND
On January 5, 2026, Tánaiste Simon Harris and Minister Patrick O’Donovan formally launched the Unscripted Production Corporation Tax Credit (Section 487A), a first-of-its-kind incentive in Europe designed to attract international investment and support Irish cultural expression. The relief provides a 20% credit on the lowest of: eligible expenditure, 80% of total production costs, or a €15 million project cap.
To qualify, projects must pass a cultural test administered by the Department of Culture and meet minimum spending thresholds, including at least €250,000 in qualifying expenditure and €125,000 in local eligible spend. This new measure, approved to run through December 31, 2028, effectively bridges Ireland’s audiovisual offerings by providing a dedicated pathway for the rapidly growing non-scripted sector.
Effective January 2026, Ireland now offers a total tax credit of 40% for qualifying VFX expenditure, achieved via a new 8% uplift on top of the base Section 481 credit. Additionally, the Digital Games Tax Credit has been formally extended through December 2031, providing long-term certainty for the gaming and post-production sectors.
NEW ZEALAND
Effective January 1, 2026, New Zealand has significantly enhanced its International Screen Production Rebate (NZSPR) by removing the Above-the-Line (ATL) compensation cap entirely and lowering the minimum spend threshold for live-action features to NZ$4 million.
To further attract mid-sized productions and large-scale post-production work, the qualifying threshold for the 5% uplift has been reduced to NZ$20 million, allowing more productions—including standalone VFX and post-production projects—to access a total cash rebate of 25%.
QATAR
Unveiled during the inaugural Doha Film Festival's Industry Days in November 2025, the new Qatar Screen Production Incentive (QSPI) offers a robust 40% base cash rebate, which can be increased to 50% through a 10% uplift for productions that hire Qatari talent, invest in local crew training, or showcase Qatari culture. Uniquely, the incentive offers regional flexibility, allowing up to 25% of qualifying spend to be incurred in neighboring Arab countries while still receiving the rebate—a strategic move to support broader Middle East storytelling.
Applications for the program are set to open in Q2 2026. This launch is supported by significant new partnerships with major international players, including Oscar-winning indie studio Neon (co-develop and co-produce films with the Qatar Film Committee), Sony Pictures (co-financing Arabic films), Miramax (TV and film development), and Company 3 (post-production/VFX facility in Doha).
ROMANIA
The Romanian cash rebate is fully operational with an annual budget of approximately €55 million, managed by the newly formed OFIC to ensure better transparency. The program offers a flat 30% on qualified local spend (with a €100k minimum spend for features), and the application process is now digital, with an estimated payout timeline of 120 days after audit. Recent legislative changes have also simplified the cultural test, making it easier for standard commercial productions to qualify without needing excessive local creative elements.
The government’s primary focus has been clearing the massive backlog of unpaid claims from 2018–2020 to prove the system's reliability. However, producers are still advised to approach with caution until consistent payment cycles are proven.
UNITED KINGDOM
Under the Audio-Visual Expenditure Credit (AVEC), the UK government’s enhanced Visual Effects (VFX) tax relief offers a substantial 39% for eligible visual effects costs, resulting in net after-tax relief of approximately 29.25%.
Crucially, the standard 80% cap on these specific costs has been removed, allowing productions to claim the credit on all qualifying UK VFX expenditure incurred on or after January 1, 2025. This structural change is designed to incentivize major international productions to keep their post-production work in the UK, thereby securing jobs and reinforcing the country's status as a hub for high-end digital artistry.
Proposed Legislation
UNITED KINGDOM
The UK industry continues to wait for a formal response to the Culture, Media, and Sport (CMS) Committee’s recommendation for a 25% Prints and Advertising (P&A) tax relief. While the Treasury recently implemented the landmark 53% Independent Film Tax Credit (IFTC), major stakeholders—led by Pact and the BFI—are lobbying for the P&A measure’s inclusion in the 2026 legislative cycle. This proposed support is intended to help smaller indie movies compete with major studio blockbusters by ensuring they have the marketing capital necessary to reach theatrical audiences effectively.
Rejected Legislation
FRANCE
Following backlash from the local industry, the French government has rejected a proposed bill that would have reduced the tax credit cap for domestic feature films. This decision preserves the current French incentive structure, ensuring stability for local productions while the separate international tax rebate (TRIP) remains unaffected at 30–40%.
Industry Highlights
United States
CALIFORNIA
California's new Program 4.0 tax credit has successfully spurred a resurgence in big-budget filmmaking, securing $1.4 billion in projected spending from major projects like The Mandalorian & Grogu and Heat 2. However, despite this blockbuster success, on-location filming in Los Angeles remains near historic lows (down ~20% in Q3) due to a contraction in reality TV and stiff global competition.
The data suggests a split market: while the incentives are reclaiming massive tentpoles, the day-to-day volume of smaller shoots and television continues to struggle against lower-cost hubs like the UK and Canada.
NEW JERSEY
New Jersey's film industry continues to surge, driven by a recently enhanced tax credit program that extends through 2049 and increases the base credit for studio partners from 35% to 40%.
On the infrastructure front, Lionsgate officially broke ground on its $125 million Newark studio (slated for a 2027 opening), while Netflix finalized its $1 billion purchase of the Fort Monmouth site, with construction of 12 soundstages underway. Additionally, 1888 Studios in Bayonne has secured a major 10-year lease with Paramount/Skydance, solidifying the state's status as a top-tier production hub rivaling traditional markets.
NEW YORK
New York City remains a resilient production powerhouse, underpinned by the state’s stable $700 million annual tax credit cap (plus a $100M Independent Film and TV Credit) and a 30% refundable credit that keeps it competitive against global rivals. While the ‘Made in NY’ marketing credit and diverse locations remain strong draws, the city is bolstering its infrastructure with new facilities, such as Robert De Niro’s Wildflower Studios, to accommodate modern blockbuster demands.
International
FINLAND
Finland is positioning itself as a cost-effective production hub in Europe, highlighting a 25% national cash rebate managed by Business Finland that covers eligible local costs. When this national incentive is stacked with various regional grants—such as those from Lapland or Tampere—producers can achieve a total reimbursement of up to 40%, making the country highly competitive for international film and TV projects.
IRELAND
Industry stakeholders have expressed significant disappointment that Budget 2026 failed to introduce a specific tax incentive for regional film and TV productions, ignoring calls to decentralize the sector beyond the dominant Dublin-Wicklow hub. While the government introduced a new 40% uplift for Visual Effects (VFX), as well as an incentive for unscripted content, critics argue these primarily benefit established East Coast studios and fail to replace the regional film development uplift needed to attract shoots to western and southern counties.
ITALY
In October, Italy's film industry associations (ANICA, APA, and labor unions) issued a stark warning that proposed cuts to government funding and the ongoing uncertainty surrounding the tax credit reform could put 75,000 jobs at risk and paralyze the sector. The Meloni government, citing the need to reduce public spending and curb subsidy "fraud," has slashed the culture fund and introduced stricter caps on the 40% tax credit, causing international productions to hesitate and local projects to stall. Industry leaders argue these measures undermine a sector that generates €16.3 billion annually and is growing faster than the national average.
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