Written by new-contact on Feb 7, 2011. Posted in Incentive News

VAT break introduced in Italy for foreign productions

International productions filming in Italy are now exempt from paying VAT costs. Productions have routinely had to add 20% to their budgets to prepare for the VAT and although it could be claimed back this had sometimes happened long after a wrap date.

Carole Andre-Smith, of Cinecitta Studios in Rome, said: “International productions not having to pay 20% more was obvious to us as an incentive. In reality the saving will actually be higher than this because productions have had to maintain some kind of business presence in Italy until the VAT has been paid back, and this presence costs money too.”

Italy already offers a tax credit of up to 25% for international productions. This incentive is worth up to 60% of a film’s total budget with a cap of USD6.5 million per film. Combined with the new VAT exemption studios such as Cinecitta could start attracting more bookings.