Film Tax Credits Promote Culture, Commerce

Why do you think the "Star Wars" movies were filmed in England? If your guess is that Chewbacca is partial to London fog, think again. It's because the United Kingdom offers tax credits that make it very attractive for filmmakers big and small to move at least part of their productions there.

A panel discussion on the tax incentives that European countries offer to filmmakers was one of the many informative presentations that took place during the 70th Annual Cannes Film Festival. I attended the festival May 20-24 in the French Riviera to promote the documentary I directed, "Lady Wrestler: The Amazing, Untold Story of African-American Women in the Ring."

The panel discussion opened with a "sizzle reel," a video with clips from movies that have utilized England's tax credits, including "Star Wars: The Force Awakens," "Fantastic Beasts and Where to Find Them" and "The Hunger Games" series.

England offers up to a 25 percent tax credit for movies that are either filmed in England or use postproduction facilities there. One of the cool things about England's tax credit system is that movies don't have to meet a certain budget amount to qualify, said Adrian Wootton, chief executive of the British Film Commission. For example, a micro-budget movie made for under $100,000 can benefit just as much as a $200 million blockbuster like "Star Wars."

"It's not about the amount" that a movie is made for, but a certain percentage of the budget that filmmakers spend in the United Kingdom, Wootton said.

In order to attract film productions and the economic boost associated with them, countries such as Hungary allow filmmakers to do "co-productions" with other nations. A movie could film partly in England and use that country's 25 percent tax credit and film partly in Hungary, earning up to another 6 percent in tax credits, for a total of a 31 percent tax credit.

What this means is that, suppose a movie's budget is $100,000. The filmmaker would receive a refund of $31,000 by using government tax credits, so that the movie was actually made for $69,000.

Co-productions encourage commerce and cooperation between countries and promote culture around the world, said Balazs Zachar, head of business affairs for Hungary's Pioneer Pictures.

"It's a very positive trend," he said. "We hope it will be here to stay for awhile."

Belgium also offers a competitive tax credit and allows filmmakers to strike co-production deals with other countries, said Tristan Goligher, producer of the independent film "Lean on Pete."

"You don't have to spend all of the money in Belgium," he said. "You can have a Belgian crew come to the U.K."

Tax credits often result in a win-win for filmmakers and for host countries, said Matthew Metcalfe, New Zealand-based producer of the new action thriller "6 Days." Filmmakers receive funding to launch their productions, while the host countries benefit from the films' cast and crew patronizing hotels, restaurants, taxicab companies and other local businesses.

"What [the United Kingdom's tax credit system] does is it encourages you to bring yourself and the production to the U.K.," Metcalfe said. "It encourages people to engage with the wider English community."

For more information about the United Kingdom's tax credit system, visit Britishfilmcommission.org.uk.