Vital for the film industry tax incentive has been adopted

Next year, in Lithuania three times more films will be made than during the previous year.  Such are estimates made by film producers after the Lithuanian Parliament today approved amendments to the Law providing for income tax incentive for film production.  According to Vilnius Film Office, this decision will not only encourage the most famous Hollywood and European filmmakers to come and shoot their films in Vilnius, but also will attract investment into the country, create new jobs.

"This incentive is vital for our film industry. Tax amendment will encourage to choose Vilnius and Lithuania for filming, which will create jobs and taxes will be paid.  This incentive will benefit not only the film industry but also the whole country", - said Artūras Zuokas, the mayor of Vilnius.

Examples of Hungary, Croatia, Bulgaria show that introduction of a similar incentive results in not only a significant increase in the volume of film production, but also creates a lot of jobs and invigorates the economy. For example, in Hungary after the adoption of tax incentive, expenditures of foreign film producers in this country jumped from 26 million euro in 2004 to 161 million euro in 2010.

According to Vilnius Film Office Director Juratė Pazikaitė, the incentives will allow Lithuania to offer not just high quality but also financially advantageous terms, making it a competitive country in the film industry.

“We have highly competent film professionals, unique landscapes, architecture, and all the seasons of the year, but so far biggest film companies opted to shoot the film, for example, in Riga, and not in Vilnius. The mere fact that this incentive in Lithuania did not work, caused us to lose projects worth millions, as their creators decided to take them elsewhere", – said J. Pazikaitė.

Kęstutis Drazdauskas, Chairman of the Independent Producers Association of Lithuania, said that Lithuanian film professionals will face a real challenge, as the number of films shot in our country will soar.

"It is likely that next year, when the incentive enters into force, in Lithuania 3-4 times more films will be made than this year. The new system will enable to attract private Lithuanian investors in the film production. It will also facilitate possibilities for the Lithuanian film producers to make films along with foreign film companies,"- said Kęstutis Drazdauskas, Chairman of the Independent Producers Association.

The amendment, which provides for 20 percent tax incentive for film production, will take effect 1 January 2014, and will be effective until the end of 2018.