Cinema and audiovisual, adjustments to the tax credit reform coming soon

The intervention is substantial. It is a sign that the Ministry of Culture has decided to get its hands heavily on the much-discussed tax credit reform, especially to mitigate certain rigidities present in the original decree in order to also mitigate effects that could be distorting or excessively restrictive provisions. According to what Il Sole 24 Ore was able to verify, a corrective decree is on its way with which the Ministry of Culture, in collaboration with the Ministry of the Economy, intends to make changes to Interministerial Decree No. 225 of 10 July 2024, which regulates the tax credit for film and audiovisual productions. The objective? To make the tax incentive system more inclusive and adapted to the needs of the market.

This intervention comes at a particular time, with the tax credit reform finally becoming operative after a year and a half of discussions, but also alarms - such as the one launched by a group of 15 associations of workers in the sector, promoters of the 'SOS Cinema' appeal - on the situation of the sector and the sword of Damocles of the appeal by some companies against the reform, with the TAR (Regional Administrative Tribunal) setting the redde rationem in court at the beginning of March.

Reading the introductory report shows how the reformed decree, the result of months of work carried out by the Mic also with some associations, aims to address three priorities: simplifying access to tax credits, rebalancing contractual relations between producers and distributors, and mitigating the distorting effects of previous regulations. The changes, already anticipated by some implementing decrees, are therefore now ready to be formalised in an organic and updated text.

Prominent among the changes introduced is the removal of the requirement for an agreement with a 'leading film distribution company'. This clause had been criticised by those who feared it would create insurmountable barriers for many independent producers. It was also stipulated that the distribution agreement must be submitted and verified in the final application.

At the same time, the circulation requirements are eased: for works with a budget of up to EUR 3.5 million, a minimum of 240 screenings, spread over a number of sales in accordance with current regulations, will be sufficient. This apparently technical change represents a breath of fresh air for those producing niche works or those with limited resources. The definition of the financing requirements is also simplified: for several categories of works, the need to prove that part of the resources come from private sources is eliminated, which was at least 40% of the cost (30% for documentaries and 50% in the case of works for TV).