Portugal Preps Tax Rebate Scheme

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Four features and four shorts from Portugal are screening at Berlin

Portugal is the latest country to announce a tax incentive scheme aimed at attracting major international productions.

The 2016 state budget authorizes a tax incentive scheme for film production in Portugal, in the form of a tax credit for film production expenditures incurred in Portugal, with eligible expenses of at least €1 million ($1.1 million).

The tax credit may be deducted from corporate income tax and will require the involvement of a line-producer based in Portugal.

“This is a long-awaited development, after many requests, both from national professionals and from the international filmmaking community, and should allow Portugal to improve its position in the global film locations market,” said Portugal’s minister of culture, Joao Soares.

Filomena Serras Pereira, president of the Portuguese film agency, ICA (Instituto do Cinema e Audiovisual) explained that there is a major desire to regulate the new scheme by the end of March, given that the initiative has direct support from the Portuguese Prime Minister, Antonio Costa.

Serras Pereira foresees a straightforward scheme, similar to the tax rebate schemes operating in countries such as France, with a similar structure of eligible expenses.

The scheme’s rate has not yet been announced but is likely to lie between 20% and 30%.

Domestic Portuguese productions will be eligible for the scheme, but only a small number will be able to satisfy the minimum requirement of incurring eligible expenses in Portugal of at least €1 million.

The main target is to attract international productions and boost co-productions.  Portugal, located along the Atlantic coast, is one of the world’s leading tourism destinations.

Research commissioned by ICA identifies Portugal’s competitive advantages as a filming location: Attractive locations, low costs, quality crew base, abundant sunlight and a huge diversity of both natural and cultural landscapes.

Countries such as Ireland have shown how a film tax incentive scheme can revolutionize the domestic film industry.

Portuguese crew rates are competitive, and the country has attracted international shoots over recent years, in particular from France, but French shoots have fallen considerably due to Gaul’s tax rebate scheme.

“The tax incentive was the missing pillar of our film policy,” explains Ms. Serras Pereira. “It will offer new business opportunities for Portuguese film professionals, through coproduction or line production, and will also help promote the country.”

Portugal has four features and four shorts screening at Berlin, including Ivo M. Ferreira’s feature “Letters from War,” and Leonor Teles’ “Batrachian’s Ballad” and Gabriel Abrantes’ “Freud and Friends” screening in Official Competition.

Hit by major austerity cuts over recent years, public support for Portuguese films has been repeatedly criticized within the sector for being insufficient. Although Portugal has maintained public support for auteur cinema – and has spawned established helmers such as Miguel Gomes, João Pedro Rodrigues and Pedro Costa – local producers have often had to focus on establishing international coproductions to finance their films. The dynamism of local producers, leveraged by public funding and foreign finance, complemented by the distinctive authorial visions of Portuguese helmers are some of the key reasons for the country’s unprecedented presence in Berlin this year. The introduction of the new tax incentive scheme will further leverage the capacity for Portuguese producers to ink co-productions in the future.

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