Cinema, the Budget Law puts a cap on the Tax Credit

In the lexicon of Italian cinema there was a word that sounded like a promise: 'splafonamento'. Translated: no ceiling. If a project turned out to be eligible, the tax credit would arrive even when applications exceeded the envisaged endowment. Now the budget law changes the script: an end to 'splafonamento' and a return to an impassable expenditure limit for tax credits for production. And the certification of the new script will arrive today with the final vote in the Chamber of Montecitorio, after the government last night received a new vote of confidence on the text approved on Christmas Eve by the Senate.

But back to the tax credit. From 2021 to September 2025, the credits authorised for production exceeded the resources set aside in the budgets by approximately 1.8 billion, which amounted to 1.72 billion in the same period. And the 2025 figures are still not final and exclude the latter part of the year in which, we will see if confirmed by the numbers, the rush of applications seems to have been unleashed. The problem had also been pointed out at the time by the director of the Mic's Cinema and Audiovisual Directorate General, Nicola Borrelli, who had warned about the issue during a conference at the 2024 Venice Film Festival. Which then, punctually, came to deflagrate. The return to the expenditure ceiling - already applied in the past and still in force for other sectors such as distribution, operation and technical industries - responds, in the Mef's vision, to this asymmetry.The novelty is not only the limit, but the method. The implementing decrees will have to redefine the procedures to ensure that expenditure does not exceed the appropriations. Translated: timing, rankings and priorities will become decisive. But on the other hand, this is a variable that introduces financial uncertainty for productions, especially independent ones, which build the balance of their budgets on the tax credit.At the same time, the framework of resources changes.

The Film and Audiovisual Fund is set at a minimum of 610 million in 2026 and 500 million annually from 2027. This is a structural downsizing that reduces the margin for expansion and imposes a more stringent selection of projects. To reinforce control comes the quarterly monitoring by the Ministry of Culture, with information flows to the Ministry of the Economy and Finance to verify the trend of credits and preserve the stability of public accounts.The sector, for its part, has signalled the risks by immediately and noisily launching the alarm: if the ceiling runs out before all applications are met, some productions could stop or be postponed, with effects on employment and on the country's international attractiveness. Competition in Europe remains fierce and often easier on the administrative side. The result, however, has not changed.The manoeuvre also intervenes on labour. For the actors' discontinuity allowance, the requirements change: at least fifteen days worked in the previous year or thirty in the two-year period.

From 2027 the Bonus Valore Cultura will debut, an electronic credit for young graduates for cultural consumption, from cinema tickets to audiovisual publishing products. An incentive to demand, rather than to supply. Finally, there is a correction that the sector considers very important: during the examination in the Budget Committee, the rule that would have limited the offsetting of tax credits with Inps contributions and Inail premiums was deleted. This would have been a blow to companies' liquidity. The cinema thus enters a new, less expansive and more supervised phase. The point now is to understand whether the system will be able to hold the balance between expenditure control and creative vitality.