Tax incentives key to rebirth

Karlovy Vary Intl. Film Festival 2012 - World Report: Central Europe

Just as major international productions have begun rolling into Prague again, thanks largely to the launch of long-sought rebates, some high-profile filmmakers are yearning for more diverse locations.

“Every second period film has been shot in Prague,” says Tom Tykwer, helmer of “Perfume: The Story of a Murderer.” “Can it be different?”

The German filmmaker recently shot sci-fi eco-polemic “Cloud Atlas,” which called for a half dozen locations and time periods designed to depict the 19th century through the year 2400. After shopping around Europe and weighing both incentives and the look of various locales, Tykwer opted to use Glasgow as a stand-in for San Francisco during the 1930s, adding a CGI Pacific Ocean.

The period architecture and hills of the Scottish city — with incentives just as enticing as those of Eastern Europe — trumped locations touted by eager Czechs and Hungarians.

Tykwer, who in many ways personifies the Central European indie who’s made good in the international arena, illustrates the challenge facing the region as helmers’ expectations grow with the scale of their projects.

Business is still brisk at Prague’s Barrandov with the second season of cable series “Borgia,” helmed by Oliver Hirschbiegel (not to be confused with Neil Jordan’s Hungary-shot “The Borgias”) filming through fall, while Czech locations stand in for North Carolina in the Depression-set “Serena.”

But “Borgia” producers have voiced frustration with the annual budget cap on Czech incentives and are said to be considering another locale for their third season.

That makes improving the Czech incentives at Barrandov a priority.

Across Central Europe, national contenders increasingly understand the importance of providing world class studios, incentives and services — vfx in particular — if they want to pull in lucrative international co-productions.

Take tiny Macedonia, a former Yugoslav republic. Undeterred by global economic recession and the outwash from the Euro crisis, Macedonia’s national film center has succeeded in doubling state coin for film support to $5 million and securing government backing for building a new studio near Skopje, the capital.

Macedonian post-production services have developed technically and creatively to a level where local firms are already taking on jobs for U.S. projects, with FX3X and new company Vertigo Visual among the most active, says Macedonian Film Fund CEO Darko Baseski.

In addition, Macedonia will introduce tax incentives next year with plans to add a scheme similar to Hungary’s, which can give a combined cash back of 25% of in-country spend, to the parliamentary docket in the new year.

Across the border to the north in Serbia — once the heart of Yugoslavia’s postwar film boom when more than 500 foreign productions were shot or serviced there between the 1950s and late 1980s — there are plans to renovate and revive the old Avala state film studios near Belgrade, the capital.

The studios, founded under Yugoslavia’s leader, Marshall Josip Tito in 1947, were partially privatized when Yugoslavia disintegrated into civil war 20 years ago. But with the last film shot there in 2000 and increasing debts, the studios were put into liquidation last year.

Now Darko Bajic, the new president of the board of Film Center Serbia, is orchestrating a government-backed plan to save the studios.

Miroljub Vuckovic, the center’s acting director, sees this as essential to putting Serbia back on the filmmaking map.

“There has been a long sleep in co-productions — almost 20 years, although fortunately not all was lost,” he says. “We maintained services for some Italian and European productions until the big reawakening in 2007, when foreign production companies spent about $18 million in Serbia.”

Since then, the film, TV and advertising business has grown and, with the founding of the Serbian Film Commission and the introduction of a 20% tax-back scheme, backers expect to see foreign expenditures in Serbia reach $30 million.

The scheme will bring it into line with another former Yugoslav republic, Croatia, where a tax rebate introduced last year has helped bring in such high-profile projects as HBO’s “Game of Thrones.”

The model for making locations more attractive has long been Hungary’s hugely popular incentive plan, introduced in 2003, which has helped fuel a boom in studios, facilities and services, and has attracted a stream of top-notch Hollywood projects, including “Mission: Impossible — Ghost Protocol” and “The Borgias.”

Local industry incentives have been subject to major political upheaval in the past year, with Budapest-born Hollywood producer Andy Vajna brought in as film commissar to clear up the mess. But the foreign incentives have stayed and inward investment remains healthy.

Karlovy Vary Intl. Film Festival 2012 / World Report: Central Europe
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