Ukraine introduces cash rebate 25% for foreign producers

September 22 can definitely  be called historic for the Ukrainian production industry, as on that day the Ukrainian parliament finally adopted a new version of the law on state support of cinema and TV, which will radically change the relationships between the state and film and TV producers, and not only Ukrainian, but also foreign.  

In short, according to the new law, it is assumed that the state provides refunds to foreign and Ukrainian producers up to 25% of the money spent by them in Ukraine. The producer of a feature film can apply for 80% state funding of its production budget (as opposed to the maximum 50%, which was all they could count on until this day).

The revolutionary aspect of the adopted law is that producers of television series can also qualify for state funding: a TV series producer is entitled to up to 50% coverage of their production expenditure as a grant from the state. 

Victoria Yarmoshchuk, executive director of the Ukrainian Motion Picture Association and CEO of KYIV MEDIA WEEK: "For the Ukrainian film industry, the new law on cinema, which, among other things, introduces the system of cash rebate 25% for foreign producers of film and television projects, is a huge step forward, because now Ukraine has become competitive on the global co-production market. Now we can offer producers from around the world not only our unique filming locations and professional services, but also an adequate system of returning production costs. We expect a rapid growth of film production in Ukraine in the coming years and are ready to consult foreign producers on how to make films in Ukraine. The Ukrainian Motion Picture Association has a database of key production and service companies, we have established contacts in administrative organizations, and we are also creating a database of Ukrainian filming locations (http://location4film.com.ua/)".

Naturally, not everyone will be able to take advantage of this privilege. Producers themselves are interested in having open and transparent mechanisms of allocating public funds in order to avoid situations, where the money can be transferred to a previously unknown one-day-old company, which, at best, will simply inflate production cost estimates, and at worst – disappear, never producing anything. Therefore, according to the new law, production companies will be undergoing annual competitive selection, and each of the selected companies will receive funding for the production of at least 2 films for the big screen (80% of the funding will be provided by the state, 20% – by the producer) and/or the TV series and films for television (50% of funding by the state, 50% - the producer) per year. In addition, each production company applying to receive state aid will have to pass the financial and production expertise, and each project – a cultural and production test.

Another revolutionary innovation is the implementation of a cash rebate system to producers (including foreign) of a part of the funds spent on production on the territory of Ukraine. The new version of the law requires the state to provide refunds to foreign and Ukrainian producers, who produced the film at their own expense, of up to 25% of the money spent by them in Ukraine for the production of films and TV series, and 10% of the costs spent on the territory of Ukraine that can be qualified as pay to the cast and crew who are not residents of Ukraine and do not pay personal income tax here.

In addition, funds will be allocated not only directly for production, but also for development and pre-production of projects, as well as their post-production, distribution (including international) and festival promotion. Also, in order to promote the national film product, the law equates the advertising of Ukrainian films to social advertising.

For more information please contact Victoria Yarmoshchuk at v.yarmoshchuk@mpa.org.ua.