Lithuania set to bow 20% tax incentives

Politicians to vote on proposed scheme

VILNIUS — Lithuanian producers and studio chiefs are confident the Baltic country will soon be back on the European film map with a new tax incentive scheme.

The 20% tax break, modelled on a simplified version of the Hungarian one, is due to be voted on by lawmakers in early May.

The Hungarian scheme, introduced in 2003, has attracted a raft of high-profile Hollywood and European films and TV productions, and boosted the development of studios, post-production companies and other facilities.

Now tiny Lithuania — population 3.2 million — hopes to emulate that success.

Ramunas Skikas, managing director of the privatized Lithuanian Film Studios and a member of the Lithuanian Producers Assn., said Wednesday a scheme that allows third-party investors to claw back tax on in-country spending on film and TV productions worth at least $57,000 is likely to be greenlit by members of parliament May 8.

“We are confident we shall be celebrating that day,” Skikas said Wednesday at an industry day event hosted by the Vilnius Film Festival.

“We’ve been knocking on doors for the past seven years and we’re happy we finally found politicians in the government and parliament who support this.”

The scheme — an amendment to the corporate profit tax law — will allow companies to offset investment in film productions against tax. By using other existing tax rules, companies can legitimately make 11.25% return on their investment.

Skikas said cash-rich companies such as banks, brewers and distillers and others in Lithuania are likely to take advantage of the scheme.

The measure will bring Lithuania into line with many countries in central Europe, reversing a relative decline in film production and investment over the past decade.

Production boomed in Lithuania in the 1990s and early part of this century, with hundreds of foreign productions, including Daniel Craig-starrer “Defiance” and “Elizabeth I,” featuring Helen Mirren and Jeremy Irons, taking advantage of low costs and good facilities.

But when Lithuania joined the EU in 2004 its currency, the Litas was pegged to the Euro and costs for foreign producers began to rise.

Recession and a steep drop in public film finding — halved to its current annual $2 million — hit filmmakers hard.

Foreign producers can also expect help from the recently launched Vilnius Film Office, described by its director, Jurate Pazikaite, as a free “24-hours, seven-days-a-week, one-stop shop for information, advice and help on shooting.”

And later this year the Lithuanian Film Center will bow, responsible for film funding, promotion, restoration and other activities.

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