When we talk about international co-productions, the first obstacle isn’t artistic or creative. It’s economic. How do you finance a film involving partners from different countries? The answer lies in a complex system of tax credits and incentives that, when properly orchestrated, can make the difference between a project that gets made and one that stays in the drawer.
The Italian System: Over 40% in Tax Credits
Italy offers some of Europe’s most generous incentives for film production. Tax credits can reach up to 40% of eligible costs for films of cultural interest, with caps varying based on the type of work. For co-productions, this means the Italian share can benefit from the incentive proportionally to its financial participation.
But be careful: obtaining recognition as a “film of cultural interest” requires a precise strategy already in the development phase. Criteria include elements such as cast and crew nationality, locations, original language, and subject matter. It’s not something you improvise once production has started.
The European Incentives Map
Every European country has its own system. France offers SOFICA and the international tax credit (TRIP), particularly advantageous for productions shooting on French territory. Romania, which has become an important production hub in recent years, guarantees up to 45% cash rebate with a relatively streamlined procedure. Germany has a complex federal system but potentially very advantageous, especially for Länder like Berlin-Brandenburg.
The crucial point in co-productions is understanding how to layer these incentives. An Italian-Romanian film can theoretically access both the Italian tax credit and the Romanian cash rebate, but only if the contractual structure and chain of rights are set up correctly from the beginning.
Common Mistakes (That Cost Dearly)
The most frequent error? Structuring the co-production contract first and only afterward verifying compatibility with tax incentives. It works exactly the opposite way: incentives must guide the structure, not adapt after the fact.
Another recurring problem is underestimating timelines. Italian tax credits, for example, are disbursed with timelines that can extend beyond a year from production wrap. This means the financial plan must include bridge financing tools or forms of bank advances.
Legal Counsel as Investment
Navigating this system requires specific expertise. A mistake in documentation or a non-optimized contractual structure can mean losing hundreds of thousands of euros in incentives. This is where specialized legal counsel becomes not a cost, but an investment with measurable returns.
Dandi Law Firm provides legal assistance in Film and New Media. Check out our Services or contact Us!
