Film Incentives
Film Incentives
Countries around the globe offer incentives of various types to encourage film producers to use the former’s locations to shoot films. They generally provide benefits such as easy processing of visas, discounts in accommodating and travel , location tariffs to facilitate road or shooting permits, assistance in identifying locations, etc. this results in multiple benefits such as a boost to tourism in these countries as well as to local film production, the creation of employment opportunities.

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"Film commissions gaining international traction"

Film and television businesses in addition to generating significant revenues help maintain sustainable economic growth through the millions of dollars spent annually for “on location” production. A studio based feature film can spend upwards of US$ 250,000 per day in a local economy and a large international television commercial can generate local spending of up to US$ 1 million in less than two weeks. This highly competitive environment makes a film commission an economic necessity and an integral ingredient in generating revenues in a region. Globally, production companies in the film, television, and multimedia industry consider film commissions a valuable partner and resource. Often the presence of a film commission, and level of development and resources offered by them will determine whether production companies will consider filming in a particular region. While there are film commissions present at a national level, respective states in particular countries also have film commissions at a state level.

Made in India - Attracting and incentivizing film productions 



"India as an international filming destination"

The success of Indian-themed movies such as Slumdog Millionaire has resulted in an increasing number of Hollywood studios coming down to India to shoot significant portions of their films. Some of the recent Hollywood movies shot in India include Eat Pray Love, A Mighty Heart, Zero Dark Thirty, The Dark Knight Rises, Life of Pi, Mission: Impossible IV, The Best Exotic Marigold Hotel and Singularity. The emergence of India as a significant player in the global entertainment industry as well as the availability of exotic locations and good technicians at significantly lower costs have also greatly contributed to the growth of foreign film shooting in the country.

Roadmap for single window clearance for film production in India: A prelude



"Mode of co-production in India"

• India has one of the most vibrant film industries in the world and given with the industry’s projected compounded annual growth rate of 10 percent, the industry has attracted the attention of global studios wanting to cash in on India’s rising middle class’ seemingly unquenchable thirst for the movies.

• Overseas studios are increasingly entering into arrangements with producers in India to jointly produce films. India’s Foreign Direct Investment (‘FDI’) regulations permit 100 percent FDI under the automatic route in film production.

• The structuring of film co-production agreements hold paramount importance in determining characterization of payments, deductibility of expenses, eliminating tax inefficiencies in the supply chain, cash flow leakages, non-recoupment of tax cost on overseas distribution, double taxation etc. from the stand-point of direct tax as well as from an indirect tax perspective.

• Film production arrangements could be on own account or through co-production structures (contractual arrangements with talent or jointly via a legal structure) Under a coproduction model, the parties join hands for mutuality of interest and share common risks, revenues and liabilities. It is imperative that the agreements are structured appropriately, clearly defining rights, obligations, scope of work and income of each party to mitigate the risk of being regarded as an association of person (‘AoP’) under the direct tax laws which could lead to tax inefficiencies, such as limitations in terms of deductibility of payments made by AoP to its members, availability of set off of losses of members in hands of AoP, deductibility of depreciation on assets owned by members in the hands of AoP etc.

Roadmap for single window clearance for film production in India: A prelude

Co- Production Treaties
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