In the fast-paced world of film production, understanding tax incentives can provide a big financial advantage. As of October 2024, tax incentive laws continue to change, with many regions adapting to changes in the global economy, local political climates, and the growing demand for content.

Whether you’re working on an independent film or a blockbuster production, staying informed about the latest tax incentives can help maximize your budget and make sure your project runs smoothly. This guide not only provides a thorough overview of tax incentives but also highlights our top recommendations for maximizing your film production budget in the best locations.

Table of Contents

Different Types of Tax Incentives

Why Filmmakers should Consider Using Tax Incentives

Best State-Specific Tax Incentives 

Notable Countries Offering Tax Incentives

Qualifying Expenses for Tax Incentives

Non-Qualifying Expenses for Tax Incentives

Conclusion

Overview of Tax Incentives

Governments worldwide, at both national and regional levels, offer tax incentives to attract film and television productions to their areas. These incentives provide financial benefits to filmmakers while allowing local economies to thrive by boosting jobs, tourism, and service industries like hotels, catering, and transportation. 

Usually, incentives take the form of a percentage return on production expenses like labor, materials, and services that are used by the production. 

With tax incentive programs constantly changing, filmmakers must stay up-to-date on how different regions and locations might compare. [tee up next section] Even though the tax incentives do change over time, these general types of incentives stay the same.

Different Types of Tax Incentives

Tax Credits

These offer a reduction in the amount of taxes owed to the government. Some tax credits are refundable, meaning that if the production company doesn’t owe enough taxes to fully use the credit, they may receive the remaining balance as a refund.

Example: Stranger Things (USA)

Filmed primarily in Georgia, which offers one of the most competitive tax incentives in the U.S., with up to 30% in transferable tax credits. Key Tip: Productions that include a promotional logo for Georgia in the credits are eligible for an additional 10% bonus.

Rebates

Rebates provide direct reimbursement for a percentage of production costs incurred in a specific region. This type of incentive is straightforward and especially appealing to independent and low-budget productions.

Example: Dune (Hungary and Jordan)

Directors took advantage of Hungary’s tax rebate program, which offers a 30% rebate on eligible expenditures for productions. Additional scenes were filmed in Jordan, where the Royal Film Commission provides logistical and financial support for productions that choose the country’s deserts for filming.

Grants

Non-repayable funds provided by governments to support film projects that meet specific criteria. Grants often require the film to contribute to cultural goals or demonstrate a substantial economic impact on the region.

Example: The Hobbit (New Zealand)

The New Zealand Screen Production Grant, offering up to a 20% rebate, played a pivotal role in attracting The Hobbit trilogy to film in New Zealand. The country's stunning landscapes, combined with its tax incentives, made it the ideal location for bringing J.R.R. Tolkien's Middle-earth to life, boosting local tourism, and establishing New Zealand as a top destination for epic film productions.

Why Filmmakers Should Consider Using Tax Incentives

                 Best State-Specific Tax Incentives for Your Production

Texas

• Texas initially received criticism for having a relatively small incentive cap, making it less attractive to big-budget productions.
• However, in recent years, Texas has made strides to improve its offerings and attract more filmmakers to the state.
• The revised Texas Moving Image Industry Incentive Program now offers up to 22.5% of eligible in-state spending for larger productions.

Georgia

• Georgia has one of the most well-known incentive programs in the U.S., offering up to 30% in transferable tax credits.
• By featuring a promotional logo for Georgia in a film’s credits, productions can also earn an extra 10% credit. Productions like Stranger Things have used these incentives to great effect, boosting both their bottom line and the local economy.

New Mexico

• A popular filming destination for TV shows and movies like Breaking Bad and The Avengers, New Mexico offers up to 35% refundable tax credits for qualified productions.
• In 2023, New Mexico increased its annual cap on incentives to accommodate more productions each year.

California

• The California Film Commission offers a competitive program that provides up to 25% in tax credits for qualified productions that film within the state.
• The Mandalorian is one example of a blockbuster production that has taken advantage of this program.

                        Notable Countries Offering Tax Incentives

Now that we’ve talked about what the tax incentive industry looks like for production in the United States, we want to share our recommendations if you think taking your production global is the way for your project to go. 

Canada

• Canada offers federal and provincial tax incentives, such as the Canadian Film or Video Production Tax Credit (CPTC).
• Productions like Deadpool have benefited from credits that can reach up to 25% of Canadian expenditures.

Australia

• With tax offsets like the Producer Offset and Location Offset, Australia offers a rebate of up to 40% for qualifying productions.
• Films such as Thor: Ragnarok have utilized these incentives, making Australia a top filming location.

Ireland

• Ireland’s Section 481 Tax Relief offers a 32% tax credit for eligible productions.
• Game of Thrones is one of the many international shows that took advantage of this program, helping to cement Ireland as a top destination for filming.

South Africa

• Offering a rebate of up to 30% on qualifying expenses, South Africa attracted productions like Mad Max: Fury Road, leveraging both its tax incentives and diverse landscapes.

Qualifying Expenses for Tax Incentives

Listed below are some expenses that would generally qualify for tax incentives. For more information on specific tax incentives in a certain place be sure to check the region’s governmental finance website for more resources. While this provides a general overview of qualifying expenses, be sure to review the specific incentives for each country, as they can vary slightly.

Non-Qualifying Expenses for Tax Incentives

Now that we’ve gone over what some qualifying expenses for tax incentives can look like on a broader level, here are some expenses that wouldn’t generally qualify for a tax incentive: 

1. Salaries for non-resident cast and crew.
2. Expenses incurred outside of the qualifying region.
3. Financing costs such as interest on loans.
4. Fines or penalties incurred during production.
5. Legal fees not directly related to production.

Conclusion

Tax incentives play a very important role in the film industry, offering a way for filmmakers to lower costs while boosting local economies. Whether you’re filming a feature film, TV show, or web series, understanding the types of incentives available in different regions can give you a competitive financial edge. By leveraging these incentives and this information, filmmakers can benefit from the support of governments that are eager to attract film and television productions.

We went over what generally can qualify and can’t qualify for a tax incentive, but be sure to use outside resources to get specifics on the region that you’re thinking of filming in like Wrapbook for information on global tax incentives and Cast and Crew for North American-specific tax incentives.  

Whether you’re planning to film in Atlanta, Georgia or in Madrid, Spain GreenlightGO can help you find your perfect production place globally.