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Small Wonder

Hungary boasts class and classical culture against a backdrop of stunning architectural marvels – and tempting new tax incentives

Those who believe that all good things come in small packages were probably thinking of Hungary when they came up with that cliché. A landlocked country, Hungary is surrounded by seven countries but it packs a whole lot within its own borders.

One of the oldest European countries, it is situated in the Carpathian Basin of Central Europe and is known for diversity – landscapes which range from flat and grassy plains to lush peaks and valleys, and a culture which makes room for both traditional wooden churches and feisty modern nightclubs.

Hungary’s scenery is gentler than striking, more pretty than stunning. But you can’t say the same thing about the built environment across the land. Architecturally, Hungary is a treasure trove, from Roman ruins and medieval town houses to baroque churches, neoclassical public buildings and Art Nouveau bathhouses.

Budapest, the capital, is the hub of superlative music and art, with one of the world’s best known opera houses as the main attraction. Hungary is one of the 15 most popular tourist destinations in the world, with a capital regarded as one of the most beautiful in the world. There is an array of museums and galleries too.

Hungary’s springs along with Lake Balaton (the largest in Central Europe) are ideal for sunbathing and have supported this culture since Roman times. Hungary is also the birthplace of renowned scientists, explorers and personalities. As for filming, it is a serene destination with reasonable pricing and great tax benefits, thanks to a new film tax-incentive system.

Temperatures in Hungary vary from -20°C to 39°C through the year. Distribution and frequency of rainfall are unpredictable due to the continental climate of the country. The western part of the country usually receives more rain than the eastern part. Weather conditions in the Great Plain can hot summers, cold winters, and scant rainfall.

Hungarian Tax Relief

1. Up to 25 per cent of the eligible production expense (Hungarian or not-Hungarian)

2. The non-Hungarian eligible spend is capped at 25 per cent of the Hungarian eligible spend

The film tax incentivehungary-budapest-300x187

1. Films (for cinema and television) produced in Hungary are eligible for a 25 per cent rebate based on their expenditure emerged in the country

2. The incentive is available through local business companies who receive tax relief after their support of films or through the custody account of the Hungarian National Film Fund

3. The scheme is part of the film support programme approved by the European Commission until of December 31, 2019 with a budget of €402 million

Registration of company and production

1. Hungarian companies registered with the National Film Office (NFO) are eligible to apply

2. Foreign companies should conclude coproduction or service agreements with Hungarian registered company

3. Production has to be registered at NFO

4. Start of filming has to be reported to NFO

What does the tax incentive system offer film-production houses?

1. Financial refund and investment opportunities to encourage foreign film producers to come to Hungary, to make films as they may reduce their film production costs this way

2. Generating additional resources for co-productions by encouraging Hungarian enterprises to make investments in motion picture production

3. Through the tax-incentive system, the amount of contribution/investment available in Hungary is 30 per cent of local film production costs. These contributions and investments come from the pre-tax profits of business associations in Hungary.

Which productions may receive contribution under the tax incentive?

1. Films produced to order (production services): Productions made in Hungary by foreign filmmakers with the participation of a commissioned Hungarian film production company

 

2. Films not produced to order (co-productions or Hungarian films): Productions made by a Hungarian film production company alone or in co-production, with the financial involvement of domestic investors

Budget Model

Under the first model, the budget of the film is fully available (typically by a foreign filmmaker or studio) but the objective is that the foreign filmmaker reduces production costs in Hungary by the refund. In this case, the contribution (refund) is directly received by the foreign filmmaker, to be provided by the domestic corporate taxpayer.

The second model is intended to support films where the producers cannot provide the total budget of the film. Therefore, they intend to involve external private sponsors as well. In this case, the funding (investment) is received by the Hungarian production company (co-producer) of the film from the domestic corporate taxpayer. In return for the investment, the taxpayer not only receives a tax incentive but it will have a share of the revenues from the film as well (the minimum thereof is not specified).Untitled1-181x300

Rohini Nag
Collection Chart
As on February 18th, 2017
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