International Tax Credit announced at Venice Film Festival

International Tax Credit: New Provisions Presented at the Venice Film Festival Festival

At the Venice Film Festival, at the Italian Pavilion, the Undersecretary for Culture, Lucia Borgonzoni, and the Director-General for Cinema and Audiovisual, Nicola Borrelli, presented the new provisions of the decree on the tax credit aimed at attracting foreign investments. Borgonzoni reiterated the importance of this measure to strengthen Italy’s image as an ideal destination for international investors, highlighting the high professionalism of Italian crews and the attractiveness of our locations.
Borrelli confirmed that the overall framework of the measure remains unchanged but pointed out some significant new features. Among these are the introduction of specific rules regarding costs for the use of artificial intelligence, increased transparency, compliance with collective bargaining agreements, and new regulations against workplace harassment. These updates aim to create a safer and more inclusive environment for all professionals in the sector while simultaneously enhancing Italy’s appeal as an investment hub for international audiovisual productions.
The text provided by the Ministry of Culture – Cinema and Audiovisual Directorate is reported as follows:

International Tax Credit Decree: Confirmed Provisions

• The recognized rate is equal to 40% of the production cost of the single work spent in Italy; only for above-the-line costs related to non-European subjects, the rate is set at 30%.
• The tax credit is granted up to an annual maximum limit of 20 million euros for each company or group of companies, while there is no maximum limit per work.
• In any case, the national production tax credit used by the same company does not count towards the 20 million annual limit per company.
• Other provisions regarding eligible costs incurred in Italy have not been modified.
• The transferability of the tax credit is confirmed.
• The deadline of 180 days from the end of the activities within which the final application must be submitted remains unchanged

International Tax Credit Decree: New Provisions

• Personnel costs and professional figures governed by national collective labor agreements are eligible, for each worker, up to the amount provided in the collective agreements stipulated by the most representative employer and trade associations, increased by up to 20%.
• The requirement to carry out at least one day of shooting/working in Italy (a long-awaited change for post-production companies) has been removed.
• The benefit is granted provided that the eligible cost is at least 250,000 euros.
• The DGCA is allowed to derogate, under certain conditions, from the ban on executive production and post-production companies holding shares of rights in the audiovisual work.
• Costs incurred in Italy related to the use of artificial intelligence are not eligible, except for the use of artificial intelligence attributable to special effects related to the “Lead Actors” category (this provision applies only to the Italian executive producer).
• It is now mandatory to communicate the phases of the work carried out in Italy where artificial intelligence was used, and contracts between Italian executive production or post-production companies and the authors, performers, and executors of the work must include specific clauses allowing them to refuse the exploitation of their work/image/professional performance by artificial intelligence systems.
• Applicants must comply with the protocol on rules against harassment and violence in the workplace in the audiovisual sector, signed between the most representative employer and trade organizations.
• A fee for the administrative processing costs has been introduced.