Authors: Robert Nešpůrek, Michal Kandráč
In the first half of 2022, the Czech film industry has continued to build on its strong momentum from 2021.
The Czech Republic has continued to provide its filming facilities to the world’s most renowned film and TV studios such as Warner Bros., Netflix, Amazon, Lionsgate, Apple TV, ZDF and Sky. The works recently produced here include, among others, Extraction 2, a sequel to Netflix’ record-breaking movie, Peacock’s thriller series Last Light and season 2 of Apple TV’s Foundation series based on Isaac Asimov’s sci-fi novels.
The first half of 2022 has seen a large increase in registrations for the Czech film incentives scheme, which provides a cash rebate to foreign filmmakers of up to 20% of their Czech expenses (details on the Czech incentive scheme are available HERE). Due to this high demand and consequent strain on the existing subsidies budget (originally EUR 32.3 million for 2022), the Czech Film Fund has had to temporarily suspend new film project registrations from April 1, 2022 until September 30, 2022.
Nevertheless, it appears that the incentive scheme should re-open for new registrations after 1 October 2022.
Having recognized the importance of the film industry for the Czech economy, the Czech government has decided to increase the film incentives budget for 2022 by a further EUR 23 million to cater to the increased demand (similarly, budget increases are expected also for 2023 and 2024). This decision is still subject to approval by the Parliament, but no major pushback is expected.
The Czech government has recently presented a new strategy that should streamline the government’s support for the audio-visual industry and utilize available funding from the Recovery and Resilience Facility.
Firstly, the Parliament is scheduled to discuss a bill capping the cash rebates under the film incentive scheme at CZK 150 million (approx. EUR 6 million) per project. Pursuant to the current proposal, the cap should apply only to projects that will be registered in the Czech incentive scheme following the effective date of this legislation (probably the end of 2022). As it currently stands, the bill does not provide for any exception in relation to expensive series consisting of multiple episodes.
Secondly, the government has decided to speed up the transformation of the Czech Film Fund into a new “Audiovisual Fund”, which should also financially support other areas, such as development and production of small screen series and gaming projects. These changes are anticipated to take effect in 2024 and many details still need to be hammered out.
We will continue monitoring the situation regarding available film incentives and effects that the legislative proposals may have on the industry and the government’s support for it.
If you wish to discuss any of these developments or other legal or tax aspects of film-making in the Czech Republic, feel free to get in touch with any one of us or your usual contact.
