Tax rebate

Details of the 30% tax rebate available in Hungary

What productions can benefit?

  • Films of all genres made for cinema release
  • Feature films, series, documentaries and animations made for televisions or other distribution platforms
  • Porn and extreme violent films, commercials, reality shows, news, sport coverage, talk- shows, talent shows and daily soap operas and scripted realities are excluded

Cultural test

  • Films applying for the incentive have to be submitted to a cultural test
  • Films must contain European content or cultural values and additional points are granted if EU nationals are either making or financing the movie (point system)
  • 16 out of 32 points has to be earned to pass

Registration of company and production

  • Applicant must be a Hungarian company or a Hungarian branch of an EU company registered by the NMIAH (National Media and Infocommunications Authority of Hungary).
  • Applicant must be the film’s producer, co-producer or production service provider who is responsible for and actively involved in the production of the film throughout.

Who provides the financial support?

  • Corporate-tax-paying domestic companies that may reduce their tax payable and tax base by the financial support they provide (double write-off)
  • The financial support is provided in the form of a cash refund (post-financing)
  • Film producing companies can request the support from the collection account of the Hungarian National Film Fund (it may charge a maximum administration fee equal to 2.5% of the subsidy granted)

Eligible expenses

  • It is based on the eligible Hungarian and the eligible non-Hungarian spend
  • Definition of eligible HU Spend: production expenditure as per the film’s registered budget / spent by the Hungarian Production Company and accounted for in its statutory tax books / paid to Hungarian tax registered subcontractors (both companies and individuals).50 % of the foreign cast members’ remuneration qualifies as eligible HU Spend if the remuneration is taxable in Hungary and if the 15 % personal income tax is paid effectively to the Hungarian tax authority. Definition of eligible non-HU Spend: same as above with the exception that it can be paid to any foreign (non-Hungarian) entity for costs material to the completion of the production. The 50 % cap for the remuneration of the foreign crew and cast members applies even if the payment is made to a corporate entity. The eligible non-HU Spend is capped at 25% of the eligible HU Spend.
  • Third country location shooting is possible. Any cost incurred abroad counts providing that it fulfils the requirements for definition of eligible HU and non-HU Spend

How much is the incentive?

  • All local Hungarian expense (with few exceptions) will qualify for a 30% rebate.
  • An additional allowance of 25% of the local Hungarian spend can be spent on foreign costs by the Hungarian Production company. This will qualify for a 30% rebate as well.
  • 1,000,000 local spend + 250,000 foreign spend = 1,250,000 qualifying spend = rebate of 30% or 375,000
  • Local and foreign spend can be in any currency and can also be spent outside Hungary.
  • No minimum spend, no cap per project, no annual fiscal budget cap.

Excluded or limited costs

  • Part of copyright costs over 4% of the budget
  • Travel costs are limited to trips from and to Hungary, stopover possible
  • P&A is limited up to 2% of the budget (but max 10m HUF)
  • Cost of services delivered by non-Hungarian sub-contractors limited up to 25% of eligible Hungarian spend.
  • Producersʼ fee (line, co-, executive and other producers) maximum up to 4%
  • Costs of completion bonds limited up to 5% of the budget (but max 100m HUF)
  • Remunerations of cast and crew members up to HUF 3 million per person and per film production will be eligible at 100% for tax rebate, and the eligibility of all remunerations exceeding this limit will be capped at 50%. (these limitations do not apply to Hungarian self-employed or loan-out cast and crew members whose remuneration is subject to different tax liability than personal income tax)
  • expenses, where date of the certificate of completion falls out of the production period or it is issued later than 3 months from the end date, are excluded
  • any expenses settled by compensation (products or services) have to be excluded
  • any costs related to a film produced about an event, are limited to the expenses incurred regarding the production, and not the event. If costs cannot be separated, all expenses should be excluded

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