Neighborliness pays dividends

Austria juggles local incentives with programs of other countries

Austria is a small country squeezed in among big brother Germany, Switzerland, Italy, Slovenia, Hungary, Slovakia and the Czech Republic. Yet Austrian producers have learned to turn their borderline position into an advantage. They’ve become specialists in multinational co-productions, juggling local incentives with subsidies and tax programs of other countries.

“There’s a good subsidy system in place in Austria and we’re doing pretty well. The only problem is that we haven’t got any sources of private equity whatsoever,” notes EPO Film’s Dieter Pochlatko.

Pochlatko’s $9 million four-country co-production “Klimt,” starring John Malkovich as the famous Austrian painter and Saffron Burrows as his model, combines money from Austria, Germany, France and the U.K.. The pic is an example of a new breed of Austrian co-productions where the Austrian producer is in the driver’s seat.

The Austrian Film Institute, one of the three main subsidy bodies along with pubcaster ORF and the Viennese Filmfund, has been lobbying for a tax shelter similar to a program in place in Luxembourg for years. It’s had little success.

“There’s support for the scheme from the ministry of culture but the treasury has given us a firm no, so I guess we have to make do with what we’ve got,” says the institute’s director, Roland Teichmann.

As there’s no local tax shelter, it’s a matter of mix-and-matching what other countries have to offer. Pochlatko, for example, managed to combine public coin with hard-boiled commercial investments from German tax fund V.I.P. “It was very difficult to come up with a recoupment plan that fulfilled the requirements of all the public bodies, but in the end we managed to make it work,” says Pochlatko.

While Germany, with its generous subsidy system, is still an important place to look for partners — and Luxembourg and France are also good — the introduction of a Hungarian tax shelter has been a real blessing for the Austrian film industry. “Budapest is only a three-hour drive from Vienna and throughout history we’ve got strong cultural ties, so it’s only natural for us to look East,” says Allegro Film’s Helmut Grasser.

Grasser is in post with another complexly linked European co-production: “The Headsman,” helmed by Simon Aeby (“Three Below Zero”). This pic collected coin from parties in Austria, Switzerland, Hungary, Germany, Luxembourg and the U.K. in order to raise the $6.5 million budget. “I have to say it was a little complicated, but then again 60% of our finance came from Austria,” Grasser says.

He believes that Austria’s small size is actually of great advantage to the local film industry. “Because everybody knows everybody else and because most of us live and work in Vienna, people can’t hide behind bureaucratic structures like they do at the public funding bodies in Germany,” he explains.

“In Germany the subsidy bodies often behave like they’re more important than the filmmakers. In Austria they actually see themselves as service providers and that makes for a very pleasant working atmosphere.”

The results are certainly encouraging. Germany should watch out, its little brother is growing up quickly.